Hawaii Final Notice / Intent to Enforce Checklist

• The lien arises when the Hawaii Department of Taxation assesses the tax.
• A lien may also arise when you file a tax return showing amounts due.
• The Department can create a lien by filing a certificate with the appropriate recording

office.

From that time forward, the lien becomes paramount against all parties, with specific exceptions for certain mortgagees and purchasers. Recording this lien in public records affects your ability to sell property or obtain financing until the debt is resolved.

Collection Period Limitations

Hawaii enacted a fifteen-year statute of limitations on tax collection through Act 166 in 2009.

The state cannot pursue collection actions such as levies or court proceedings after fifteen years from the date of assessment.

For taxes assessed before July 1, 2009, the collection period expired on June 30, 2024.

Understanding the collection period limitations helps you evaluate your options and the

Department’s remaining enforcement timeline.

Wage Levy Procedures

The Hawaii Department of Taxation may issue a continuous wage levy to collect unpaid tax debt from individuals. Your employer must withhold twenty-five percent of your gross salary, wages, or compensation and remit that amount to the Department until the debt is paid in full when the

Department issues a wage levy notice.

This levy remains continuous from the date it is first made under Hawaii Revised Statutes section 231-25. Once a wage levy takes effect, you cannot stop it by entering into a payment agreement or making partial payments, although additional payments will shorten the levy duration.

Hardship relief may be available if the levy prevents you from affording food, rent, or medication.

You must submit a written request with Form CM-2, Statement of Financial Condition and Other

Information for Individuals, along with supporting documentation.

The Department will release a wage levy only under these conditions

• The Department will release the wage levy when you have paid the debt in full.
• You can obtain a release by providing proof of your bankruptcy filing.

Payment Plan Options

You may request a payment plan to resolve your tax debt over time. A non-refundable fifty-dollar processing fee applies to payment plans under Hawaii Revised Statutes section 231-25.5, and you must file all required tax returns before the Department will approve any payment arrangement.

The Department evaluates payment plan requests based on your current financial condition and ability to pay. Payment plans prevent new enforcement actions from beginning, but you must maintain all agreed-upon payments to keep the arrangement in good standing.

Steps to Take When Facing Collection Action

Review any notice carefully to identify the tax type, tax period, total amount owed, and any stated deadlines. Gather your tax records, including original returns, payment receipts, prior correspondence, and documents showing your current financial situation.

Contact the Hawaii Department of Taxation immediately using the contact information provided on the notice. Verify that the stated debt is accurate by comparing the notice amounts to your records and identifying any payments that may not have been properly credited.

Respond in writing before any stated deadline using these practices

1. Keep copies of all correspondence you send and retain proof of mailing for your records.

2. Document all phone conversations with Department staff by recording names, dates, and key discussion points.

3. Note any information or commitments the Department provides during your discussions.

4. Consider consulting a tax professional if your situation involves complex issues or disputes.

Common Mistakes That Worsen Your Situation

Missing response deadlines can trigger immediate enforcement actions, as the Department typically does not extend deadlines without written agreement. Ignoring follow-up notices creates additional complications and allows enforcement to proceed without your input.

Providing incomplete financial information when requesting payment plans may result in the denial of the arrangement. Moving without notifying the Department prevents them from contacting you about case developments or enforcement status changes.

Failing to keep detailed records of all payments and correspondence makes it difficult to prove what you have paid. Sending payments without proper documentation may result in misapplied payments that do not credit to your account correctly.

Your Rights and Available Relief

Hawaii’s tax laws provide specific procedures for disputing assessments and requesting relief from collection actions. You have the right to appeal assessments through administrative and judicial channels, though timing requirements apply.

Hardship provisions may provide temporary relief from collection actions if enforcement would prevent you from meeting basic living expenses. Understanding these options and acting promptly preserves your ability to resolve tax debts through methods less disruptive than enforced collection.

The Department offers offer in compromise programs for taxpayers who cannot pay the full amount due to doubt as to collectibility or exceptional circumstances. You maintain appeal rights even while discussing payment arrangements with the Department.

Facing State Enforcement or Payroll Tax Issues?

If you’ve received a state tax notice and aren’t sure how to respond, we can help you review your options and next steps.

We help with

• State enforcement actions and notices
• Payroll tax debt review and resolution
• Penalty and interest reduction options
• Payment plans and compliance solutions
• Representation before state tax agencies

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