As Harry H. Ikeda, a Lihu‘e barber, sits in jail for failing to pay his general-excise tax, his sister Barbara Oki continues to fight against the ruling Friday, and the prior rulings, that sent her brother to the Kauai County
As Harry H. Ikeda, a Lihu‘e barber, sits in jail for failing to pay his general-excise tax, his sister Barbara Oki continues to fight against the ruling Friday, and the prior rulings, that sent her brother to the Kauai County Correctional Facility.
Ikeda, who believes that the state general-excise tax is unjust and unconstitutional, had his appeal denied in late September by the Hawaii Supreme Court, and now faces an earlier-imposed District Court sentence of 45 days in jail and a $10,000 fine.
He will start paying $100 a month in January, said Stephen Hironaka, criminal tax investigator for the state Department of Taxation. But, for the next 45 days, “Mr. Ikeda is in jail.”
“He never complains. He says the Lord works all things out for good,” said Oki, when asked how Ikeda was doing in KCCC. “He’s a Christian. He’s administering Jesus Christ to everybody.”
With District Court Judge Frank Rothschild presiding, Oki said she and her brother stated their case.
“The State…maliciously instituted criminal prosecution in a civil breach of obligation under H.R.S. 237, general excise tax law” by falsely charging him with committing penal offenses illegally taken from another H.R.S. Chapter 231, dealing with the administration of taxes, wrote Ikeda in his brief to the court.
“He is going to debtor’s prison,” said Oki, which she said is against the Hawai‘i state Constitution.
But Rothschild disagreed. He added after sentencing that if Ikeda does not get a general-excise tax license, and continues to cut hair, he could be sentenced to the remaining 320 days in jail and be subject to $15,000 more in fines.
Oki said yesterday that her brother will not get the license.
Ikeda was charged in February 2001 with three counts of violating state law by failing to secure a general excise-tax license and willfully failing to file his general excise-tax returns for 1998 and 1999.
He was convicted and sentenced in January 2002 to one year in jail. All but 45 days were suspended, and he was ordered to pay a fine of $25,000, with $15,000 suspended by Rothschild.
And Hironaka said that he will be checking on Ikeda.
“If he doesn’t fly right, he will be back in jail,” said Hironaka. “For now, it’s over,” he added.
Oki, on the other hand, has continued to fight for her brother. She plans on sending another appeal to the state Supreme Court.
“Do you want to bet that this barber is the first to go to debtor’s prison? They are using the same law to go after other mom-and- pop stores,” said Oki. “People come to see us. They are afraid” that the state might come after them next.
“All attorneys are totally ignorant of the general excise-tax law” anyway, said Oki, adding that Hawai‘i is the only state where the general excise tax is applied to a person.
So Oki and Ikeda have written their own appeal, and they have handled the case entirely on their own.
“We’re fighting for one of our fundamental rights, for our livelihood,” she said.
“Everyone that does business in the state is required have a license,” said Hironaka in an earlier interview.
Those who are self-employed are required to pay the $20 one-time fee for the general excise tax license, and 4 percent of their yearly gross revenues to the state, Hironaka said.
Only Hawai‘i residents who are employed by companies paying general-excise taxes are exempt from the tax law, he added.
Ikeda canceled his excise-tax license when he found out that the U.S. Supreme Court had declared that an individual person was not required to have the license. When he wrote to state officials in December 1998 to get a clarification on the ruling and no state official answered him, he canceled his license and paid no general-excise taxes.
“Reflecting back on 32 years working as a barber, I never charged anyone a tax for a haircut, yet believed that I was forced to give the state a 4 percent cut of my hard-earned labor,” wrote Ikeda.
Hironaka said that Ikeda is not a target. “We are looking for a pattern of three, four, five years” of non-payment of the general-excise tax, he said.
Staff writer Tom Finnegan may be reached at 245-3681 (ext. 226).
