New Hawaii Partnership Withholding Tax

Hawaii's governor signed a new law (SB 1360) July 9 requiring partnerships (including LLCs taxed as partnerships), estates and trusts to withhold taxes on nonresidents starting 2019.

The partnership must withhold an amount equal to the highest marginal tax rate applicable to a nonresident taxpayer multiplied by the amount of the taxpayer's share of income attributable to Hawaii.

Therefore withholding is required even if distributions are not made to the nonresident.

For a consultation on your business’s nonresident tax obligations, contact me today.