Albert Einstein once said, “You have to learn the rules of the game. And then you have to play better than anyone else.” That’s why it’s critically important for tax practitioners, and people having interaction with the tax authorities, to know the tax rules. The tax rules include not only the law, but also any regulations, interpretations, or other guidance that has been issued by the authorities.
When it comes to searching for Hawaii tax laws, our Capitol website leaves very little to be desired. It earned the Online Democracy Award as the nation’s top legislative website from the National Conference of State Legislatures in 2012. It earned the award for, among other things, the vast amount of information, historical and otherwise, that is available on the site.
When it comes to searching for regulations and administrative interpretations of the laws, the Department of Taxation has an extensive collection of information online, including laws, regulations, Tax Information Releases, Department of Taxation Announcements, and other publications that the Department has issued over the years.
But, sorry to say, there are issues with this collection of information that have been frustrating earnest researchers, including several practitioners and me.
First, there are items marked “Obsolete” or “Revoked” — that’s okay because the legal landscape does change from time to time — but the item so marked is then depublished. The link to access the item no longer works. That is not okay. The guidance when issued was valid and is important historical information. Also, tax audits often go back several years so guidance that is obsolete or revoked today may still be relevant to audits or appeals involving prior taxable years.
Second, and related to the first concern, the website doesn’t tell you when a particular item was marked Revoked or Obsolete. Sometimes there are written documents (a recent Tax Information Release, for example) that calls out prior guidance and says that it is no longer valid. But that’s not always what happens.
In Tax Information Release 2021-01, for example, the Department explained that it had published a series of releases relating to the motion picture and TV production industry in 2006, 2008, 2009, and 2010. On April 5, 2019, the release says, the Department revoked all four of those releases, depublished them from its own website, and ordered the Hawaii Film Office, which also published the releases on its site, to depublish them as well. New administrative rules taking a contrary position were adopted in November 2019.
The April 5, 2019, depublication date apparently was not contained in any published memo or guidance prior to 2021. That date is very important, as it tells us that the Department apparently recognized the old guidance as valid until then. Some sort of document or statement should have been published at that time as a matter of simple fairness. It also may have been required by the Uniform Information Practices Act.
Unfortunately, this is not the only example of guidance that has been depublished with no warning and with no indication of when the existing guidance was changed from valid to obsolete.
It would help the taxpaying public a lot if obsolete or revoked guidance could still be accessed by taxpayers who may be legitimately curious to know what the Department’s position was. It also would help tremendously if taxpayers and practitioners could figure out the date on which a piece of guidance ceased to be valid.