One of the things I hate most when I call tech support or customer service is the time I have to wait on the phone before a human picks up the phone to take my call. Most of the time someone does, in fact, pick up the phone. However, if you are a taxpayer with questions and you call the Hawaii Department of Taxation’s customer service line, there is a more than 50 percent chance that your call won’t be answered. At all.
If taxpayers are going to have questions — and they will — and the Hawaii Department of Taxation is unable to help them, there should be resources available so they can find their answers, either by themselves or with the help of tax professionals. In fact, robust guidance should be made available since it helps assure that the answers given to people are consistent. It also effectively deputizes the tax practitioners — the tax attorneys, CPAs, PAs, EAs and others — because they are obliged to advise their clients either in accordance with the department’s published guidance or, if the practitioners don’t agree with the guidance, that the position they are thinking of taking is in conflict.
Here is a chart of published guidance issued by the Department over the past several years, including Tax Information Releases, Department of Taxation Announcements, Tax Facts, and private letter rulings (published in redacted form).
Over the most recent five years, the number of pieces of guidance published by the Department of Taxation has been trending downward. But there are no indications that our Hawaii tax laws have gotten any simpler. Indeed, one reason the Tax Foundation of Hawaii exists is to educate lawmakers and the public on what these laws say because ordinary people (including some lawmakers, understandably) have such a tough time understanding them.
We understand that the department’s current policy is that they will not issue guidance on issues that they think are clearly addressed by the existing law and guidance. The tricky part, however, is that most normal people don’t know the existing law or know how to find the guidance. Also, for the department staff, knowing how state tax laws work is their full-time job, so what is clear to them might not be clear to anyone else. We ask those in state government to consider these comments and allow the guidance to flow more freely.
Tom Yamachika is president of the Tax Foundation of Hawaii.