Hawaii Hawaii Withholding Tax Return for Dispositions by Nonresident Persons on Property Interest

Hawaii Withholding Tax Return for Dispositions by Nonresident Persons on Property Interest
Form N-288 Rev 2022 Hawaii Withholding Tax Return for Dispositions by Nonresident Persons of Hawaii Real Property Interests
Clear Form
		
FORM
	
	
	

STATE OF HAWAII — DEPARTMENT OF TAXATION

HAWAII WITHHOLDING TAX RETURN FOR
DISPOSITIONS BY NONRESIDENT PERSONS	
OF HAWAII REAL PROPERTY INTERESTS

N-288	

	 (REV. 2023)	
		
		

2024
N288_I 2023A 01 VID01

(NOTE: References to “married” and “spouse” are also references to
“in a civil union” and “civil union partner,” respectively.)

•   ATTACH YOUR CHECK OR MONEY ORDER HERE   •  

Copy A of Form(s) N-288A and your check or money order MUST be attached.

1	

To Be Completed by the Transferee/Buyer Required to Withhold
Complete Lines 1 - 6.
Name of Transferee/Buyer	

Transferee/Buyer’s SSN or FEIN

Address (Number and Street)

City, State, and Postal/ZIP Code (Province, Postal Code, and Country)

2	

Description and Location of Property Acquired (Include Tax Map Key Number)

3	

Date of Transfer	

	

4	

Number of Forms N-288A Attached	

5	

6	

Total Amount Realized on the Transfer	

Total Amount Withheld

100

Please
Sign
Here

I hereby declare under penalties provided by section 231-36, HRS, that I have examined this return and accompanying attachments, and, to the best of my knowledge and belief,
they are true, correct, and complete. Declaration of preparer (other than individual, partner or member, fiduciary, or corporate officer) is based on all information of which preparer
has any knowledge.

h  ________________________________________________ 	 ________________________________ 	 ____________________
	
	

Signature of Transferee/Buyer (Individual, Partner or Member, 	
Fiduciary, or Corporate Officer)

	

Title (if applicable)	

Date

Date			

Preparer’s Identification Number

Preparer’s signature 		
Check if
Paid
Print preparer’s name † 		
lf-employed † 
Preparer’s Firm’s name (or			 Federal E.I. No.	
if self-employed), †
Use Only yours
address, and Postal/ZIP Code			
Phone No.		

General Instructions
Purpose of Form

A 7.25% withholding obligation is generally
imposed on the transferee/buyer when a
Hawaii real property interest is acquired from a
nonresident person. This withholding serves to
collect Hawaii income tax that may be owed by
the nonresident person. Use this form to report
and transmit the amount withheld.
Note: You are not required to withhold if any
of the exceptions listed on page 2 apply.
See Tax Facts 2010-1, Understanding HARPTA,
and Tax Information Release No. 2017-01, Withholding of State Income Taxes on the Disposition
of Hawaii Real Property, for more information.

Amount to Withhold
Generally, you must withhold 7.25% of the
amount realized on the disposition by the transferor. See Amount realized under Definitions,
later.
Joint Transferors/Sellers.—If one or more
nonresident persons and one or more resident
persons jointly transfer a Hawaii real property
interest, first, determine the amount subject to
withholding by allocating the amount realized
from the transfer among the transferors/

sellers based on their capital contribution to
the property. For this purpose, a taxpayer and
spouse are treated as having contributed 50%
each. Second, withhold on the total amount
allocated to nonresident transferors/sellers.
Third, credit the amount withheld among the
nonresident transferors/sellers as they mutually
agree. The transferors/sellers must request that
the withholding be credited as agreed upon
by the 10th day after the date of transfer. If no
agreement is reached, credit the withholding
by evenly dividing it among the nonresident
transferors/sellers.

Who Must File
A transferee/buyer of a Hawaii real property
interest, including an individual, corporation,
partnership, or fiduciary, must file Form N-288 to
report and transmit the amount withheld. If two or
more persons are joint transferees/buyers, each
of them is obligated to withhold. However, the
obligation of each will be met if one of the joint
transferees/buyers withholds and transmits the
required amount to the State of Hawaii, Department of Taxation (Department).

When to File
A transferee/buyer must report and transmit
to the Department the tax withheld by the 20th

		
ID NO 01

†
†

day after the date of transfer. Timely mailing of
Forms N-288 and N-288A by U.S. mail will be
treated as timely filing.
Hawaii has adopted the Internal Revenue
Code (IRC) provision to allow documents and
payments delivered by a designated private
delivery service to qualify for the “timely
mailing treated as timely filing/paying rule.” The
Department will conform to the Internal Revenue
Service (IRS) listing of designated private delivery
service and type of delivery services qualifying
under this provision. Timely filing of mail which
does not bear the U.S. Post Office cancellation
mark or the date recorded or marked by the
designated delivery service will be determined
by reference to other competent evidence. The
private delivery service can tell you how to get
written proof of the mailing date.

Where to File
Mail Form N-288, Copy A of Form(s) N-288A,
and your check or money order to:
	
Hawaii Department of Taxation
	
P.O. Box 1530
	
Honolulu, Hawaii 96806-1530

FORM N-288 (REV. 2023)

FORM N-288
(REV. 2023)	

Form(s) N-288A and Your Check or
Money Order Must Be Attached
Anyone who completes Form N-288 must
also complete a Form N-288A, Statement of
Withholding on Dispositions by Nonresident Persons of Hawaii Real Property Interests, for each
nonresident transferor/seller subject to withholding.
If two or more nonresident transferors/sellers jointly transfer a Hawaii real property interest, prepare a separate Form N-288A for each
nonresident transferor/seller. A separate Form N288A should also be prepared for both taxpayer
and spouse whether or not they will be filing a
joint return for the year in which they transferred
their Hawaii real property interest. Copy A and
your check or money order must be attached to
Form N-288. Copy B must be sent to the transferor/seller. Copy C is for your records. To receive
credit for the amount withheld, the transferor/seller must file a Hawaii income tax return.

Penalties
In addition to the penalties provided under
sections 231-34, 231-35, 231-36, and 231-39,
Hawaii Revised Statutes (HRS), if a person is required but fails to withhold tax under section 23568, HRS, that person is made liable for the tax.

Definitions
Nonresident person means every person
other than a resident person.
Property or real property means all land
and appurtenances thereof and the buildings,
structures, fences, and improvements erected
on or affixed to the land, and any fixture which
is erected on or affixed to the land, buildings,
structures, fences, and improvements, including all machinery and other mechanical or other
allied equipment and the foundations thereof,
whose use is necessary to the utility of the land,
buildings, structures, fences, and improvements,
or whose removal therefrom cannot be accomplished without substantial damage to the land,
buildings, structures, fences, and improvements,
excluding, however, any growing crops.
Resident person means any: (1) Individual
included in the definition of “resident” in section
235-1, HRS; (2) Corporation incorporated or
granted a certificate of authority under chapter
414, 414D, or 415A, HRS; (3) Partnership
formed or registered under chapter 425 or
425E*, HRS; (4) Foreign partnership qualified
to transact business pursuant to chapter 425 or
425E*, HRS; (5) Limited liability company formed
under chapter 428, HRS, or any foreign limited
liability company registered under chapter 428,
HRS; provided that if a single member limited
liability company has not elected to be taxed as
a corporation, the single member limited liability
company shall be disregarded for purposes of
section 235-68, HRS, and section 235-68, HRS,
shall be applied as if the sole member is the
transferor; (6) Limited liability partnership formed
under chapter 425, HRS; (7) Foreign limited
liability partnership qualified to transact business
under chapter 425, HRS; (8) Trust included in

PAGE 2
the definition of “resident trust” in section 235-1,
HRS; or (9) Estate included in the definition of
“resident estate” in section 235-1, HRS.
Transferee/Buyer means any person, the
State and the counties and their respective subdivisions, agencies, authorities, and boards, acquiring real property which is located in Hawaii.
Transferor/Seller means any person disposing real property which is located in Hawaii.
Amount realized means the sum of the cash
paid, or to be paid (not including interest or original issue discount), the fair market value of other
property transferred or to be transferred, and the
amount of any liability assumed by the transferee/buyer or to which the Hawaii real property
interest is subject to immediately before and after
the transfer. Generally, the amount realized, for
purposes of this withholding, is the sales or contract price.
Date of transfer means the first date on
which consideration is paid or a liability is assumed by the transferee/buyer. Payment of consideration does not include the payment, before
the passage of legal or equitable title (other than
pursuant to an initial purchase contract), of earnest money, a good-faith deposit, or any similar
sum primarily intended to bind the parties to the
contract and subject to forfeiture. However, a
payment that is not forfeitable may nevertheless
be found to constitute earnest money, a goodfaith deposit, or a similar sum.
An individual’s Identification number is the
social security number. The IRS issues Individual
Taxpayer Identification Numbers (ITINs) to certain aliens who are required to have a U.S. taxpayer identification number but who do not have,
and are not eligible to obtain, a social security
number. The ITIN issued by the IRS must be
used as the individual’s identification number. If
the individual has applied for an ITIN but the IRS
has not yet issued the ITIN, write “Applied For.”
For any other person, the identification number
is the federal employer identification number
(FEIN). For a single member LLC that has not
elected to be taxed as a corporation, where the
only member is an individual, the identification
number would be the social security number
of the individual. For a revocable living trust, or
any other trust in which an individual is treated
as the owner of the trust, the identification number would be the social security number of the
individual. For all other trusts, the identification
number would be the FEIN of the trust.

Exceptions
You are not required to withhold if the transferor/seller furnishes to you Form N-289, Certification for Exemption from the Withholding of
Tax on the Disposition of Hawaii Real Property,
stating that:
1)	 The transferor/seller is a resident person, or
2)	 That by reason of a nonrecognition provision
of the IRC as operative under chapter 235,
HRS, or the provisions of any United States
treaty, the transferor/seller is not required to
recognize any gain or loss with respect to the
transfer, or

3)	 For the year preceding the date of the transfer
the property has been used by the transferor/
seller as a principal residence, and that the
amount realized for the property does not exceed $300,000.
If you receive a certification, you cannot withhold any tax, unless you know that the certification is false. The certification must be signed by
the individual, a responsible officer of a corporation, a member or general partner of a partnership, or the trustee, executor, or equivalent fiduciary of a trust or estate.
Belated notice or false certification.—If
after the date of transfer you receive notice that
the certification you received is false, you can
rely on the certification and not withhold on consideration paid before you received the notice.
However, you must withhold the full 7.25% of the
amount realized from any consideration that remains to be paid, if possible. You must do so by
withholding and paying over the entire amount of
each successive payment of consideration until
the full 7.25% has been withheld and paid to the
Department. These amounts must be reported
and transmitted to the Department by the 20th
day following the date of each payment.

Withholding Certificate Issued by
the Department of Taxation
A withholding certificate may be issued by the
Department to reduce or eliminate withholding on
dispositions of Hawaii real property interests by
nonresident persons. The certificate may be issued if 1) the transferor/seller will not realize any
gain with respect to the transfer, or 2) there will
be insufficient proceeds to pay the withholding
required after payment of all costs.
Attach a copy of the approved Form N-288B,
Application for Withholding Certificate for Dispositions by Nonresident Persons of Hawaii Real
Property Interests.

Specific Instructions

Lines 1.—Enter the name and identification
number (social security number (SSN) or federal
employer identification number (FEIN)) of the
transferee/buyer. Enter the home address of the
individual or the office address of the entity.
Lines 2.—Enter a description of the property
including its location and the nature of any substantial improvements, such as an apartment
building or warehouse. Include the tax map key
number.
Line 5.—Enter the amount realized. If the transferor/seller is reporting the gain under the installment method, (i.e., agreement of sales or
purchase money mortgages) enter the principal
portion of the total payments for the year.
Line 6.—Enter the amount withheld. If the amount
required to be withheld has been reduced or
waived by the Department, attach a copy of the
approved Form N-288B. Also, if one or more of
the transferors/sellers are exempt from the withholding and you are issuing the exempt transferor/seller a Form N-288A, attach a copy of the
exempt transferor/seller’s Form N-289.