Resource: Apply for General Excise Tax (GET) exemptions and tax credit through the Enterprise Zones (EZ) Partnership Program

resource

Apply for General Excise Tax (GET) exemptions and tax credit through the Enterprise Zones (EZ) Partnership Program

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(808) 587-2750

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About the Business Development & Support Division (BDSD)

Under the State of Hawaiʻi's Business, Economic Development & Tourism's (DBEDT), the Business Development & Support Division (BDSD) promotes industry development and diversification in Hawaii by supporting existing and emerging industries; attracting new investment and businesses that can create more high-skilled, quality jobs in the State; increasing exports of Hawaii products and services; expanding Hawaii’s participation in global trade and commerce; by supporting small business and community-based organizations; and building resiliency to downturn in defense industry spending.

EZ OVERVIEW

The Enterprise Zones (EZ) Partnership Program gives State & County benefits to companies in an effort to stimulate business activity, job preservation, and job creation in areas where they are most appropriate or most needed. If your business meets the eligibility requirements and you enroll in the program you can reduce your State taxes and receive other county benefits for up to seven years!

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EZ BENEFITS

State Benefits

Businesses which satisfy annual requirements will qualify for the following State tax benefits for up to seven consecutive years:

100% exemption from the General Excise Tax (GET)
- The GET exemption applies only to revenues from EZ-eligible activities
- Licensed contractors are also exempt from GET on construction done for an EZ enrolled business at their EZ company site
An 80% non-refundable State income tax credit the first year
- This non-refundable credit goes down 10% each year for 6 more years – ending at 20%
An additional non-refundable income tax credit equal to 80% of annual Unemployment Insurance premiums the first year
- This non-refundable credit goes down 10% each year for 6 more years – ending at 20%

NOTE: The two non-refundable income tax credits combined may not exceed 100% of income tax owed to the State.

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Maui County Benefits

Maui County (Maui, Lanai, and Molokai)

Priority business permit processing

Each county offers eligible businesses additional benefits. To see the benefits offered in Hawaii’s other counties, please visit invest.hawaii.gov/ez.

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Additional options for Manufacturing and Agricultural Businesses:

EZ tax credits and exemptions may be extended for businesses engaged in the manufacturing of tangible personal property or in the production or processing of agricultural products, for an additional three years
Allow the receipts and sales of a business’s establishment in all enterprise zones located within the same county to count towards qualification requirements.

EZ ELIGIBILITY

Companies must meet the following requirements:

Your company must reside in one of the EZ locations
At least half of a firm’s annual gross income must be from one or more of the following activities:
- Agricultural production or processing
- Manufacturing
- Wholesaling/Distribution
- Aviation or maritime repair or maintenance
- Telecommunications switching and delivery systems
- Information technology design and production
- Medical research and clinical trials
- For-profit training programs in international business management or environmental remediation
- Biotechnology research, development, production, or sales
- Repair or maintenance of assisted technology equipment
- Certain types of call centers
- Wind energy producers

Other businesses are not eligible, including retailers and some professional services. Contractors (firms which build, maintain, or repair real estate, such as custodial, construction, painting, electrical, and plumbing firms) also are ineligible to enroll in the EZ program.

EZ LOCATIONS

Each county may select up to six zones for approval by the Governor. Zones exist for 20 years each. Zones may also be expanded to include adjacent eligible areas during the zone’s 20-year existence. 20 zones currently exist statewide.

State of Hawaii

View a statewide map of all zone locations in Hawaii.

Maui County (Maui, Molokai, & Lanai)

View a map of Maui County zones

Molokaʻi
Lanaʻi
Greater Maui
West Maui
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To see the maps of EZ locations in Hawaii’s other counties, please visit invest.hawaii.gov/ez

To see if your business is located within a zone, please see the Hawaii Office of Planning interactive GIS Maps: http://histategis.maps.arcgis.com/apps/Viewer/index.html?appid=3f874cf1bee84b169fe69f4c99a4eec5

EZ ENROLLMENT

To enroll in the EZ program complete the following steps:

Confirm your company meets the Eligibility Requirements
Create an eHawaii.gov Account. Need help? Watch the video to learn how.
Go to the Enrollment Application For Businesses, login to your eHawaii.gov Account, and complete the form

Once complete, DBEDT will verify that your business is EZ-eligible and will then forward your application to your County EZ Coordinator. You will be notified by mail if your EZ application is approved. If approved, your 84-month period of eligibility will usually begin on the first day of the month following your approval date.

ANNUAL REQUIREMENTS

All companies within the EZ program are required to do the following:

Be sure your eHawaii.gov Account is linked to your company account. Please do the following:
- Create an eHawaii.gov Account if you haven’t already. Watch the video to learn how.
Complete the End-of-Year Report at the end of each tax year.
- DBEDT will review the report to determine if your business has satisfied the EZ hiring or for agricultural businesses, gross receipts requirements. Upon approval, DBEDT will issue a certification letter to your company and notify the County.
Allocate and apportion gross receipts from EZ-eligible activities that take place in the county throughout each tax year. Eligible activities include: manufacturing; wholesaling; agriculture; aviation and maritime cleaning, repair, and maintenance; telecommunications switching and delivery systems; information technology design and production; medical research, clinical trials, and telemedicine; and/or for-profit training programs in international business management or environmental remediation.
Track of the number of full-time employees during each pay period throughout each tax year (Full-time = 20 or more hours per week per pay period). Leased employees working 20 or more hours per week may be counted as full-time employees.
Attach copies of the certification letter to your State General Excise Tax reconciliation form and your State income tax return.
Complete and attach State Tax Department Form 756 (enterprise zones tax credit) to the State income tax return.
Contact your county EZ coordinator for instructions on how to claim the county’s EZ tax benefits, if applicable.

The Enterprise Zones Program recognizes that small family-run agricultural businesses may not necessarily employ full-time workers other than their family. As such, agricultural businesses:

May increase gross sales by 2% annually in lieu of meeting the hiring requirements
May use income from value-added products (retail and wholesale) for certification purposes only
In the event of a natural disaster, agricultural producers and processors may apply for EZ benefits by completing the annual Force Majeure Event Claim Application.

After a company completes seven (7) years in the EZ program they are graduated and cannot re-enroll. Agricultural production and manufacturing companies, however, can apply for a 3-Year Extension.

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