TAX NEWS - April 2009

Hawaii Tax: Tour Operator Found Guilty of Tax Violations

The Honorable Judge Edwin Nacino found Maui Duck Tours, LLC, guilty as charged for six counts of willful failure to file annual general excise tax returns for each of the calendar years 2002 through 2007. Maui Duck Tours, LLC was sentenced to one year of probation for each count with a fine of $1,000 per count for a total fine of $6,000.00.

Miles Needham, as the responsible person for Maui Duck Tours, LLC, was also found guilty for six counts of willful failure to file annual general excise tax returns for Maui Duck Tours, LLC. Needham was sentenced to one year of probation for each count, to be served concurrently, with a fine of $1,000 for each count for a total fine of $6,000.00.

In addition to the $12,000 in total fines between Maui Duck Tours, LLC and Needham, Judge Nacino also issued a free-standing order of restitution in the amount of $96,962. The restitution is to cover the general excise due to the State of Hawai'i.

Hawai'i's general excise tax is 4% of gross retail income for calendar years prior to 2007 and 4.5% in 2007 for business conducted on O'ahu. The restitution order for the payment of $96,962 would equate to a gross income of $2.4 million dollars.

The willful failure to file general excise tax returns is a misdemeanor violation as described in HRS §231-35. Anyone convicted of this offense can be subject to a fine up to $25,000 per tax violation, imprisonment up to one year, or probation.

Dan Umemoto
Criminal Tax Investigator