Instructions For Form N-172 - Department Of Taxation State Of Hawaii (Page 2 of 2) in pdf

INSTRUCTIONS

FORM N-172

(REV. 2012)

PAGE 2

business or occupation. (Section 235-1, HRS). The disability of a person claiming to be totally

disabled must be certified to in a three step process. First, there must be a medical determination

that the person is totally disabled, either physically or mentally. Second, the disability must be

permanent. This means that at the time of certification the disability can be expected to result

in death or has lasted or can be expected to last for a continuous period of not less than 12

months. The 12 month requirement is inapplicable when the disability is determined to be a

terminal state or where it does actually result in death. Third, there must be a determination that

the permanent and total disability results in the person’s inability to engage in any substantial

gainful business or occupation. Substantial gainful business or occupation shall be determined by

the measure of a totally and permanently disabled person’s earned income. It shall be presumed

that an individual whose earned income is greater than $30,000 for the taxable year is engaged in

a substantial gainful business or occupation.

The disability shall be certified to by (1) a physician licensed under chapter 453, (2) a qualified

out-of-state physician who is currently licensed to practice in the state in which the physician

resides, or (3) a commissioned medical officer in the United States Army, Navy, Marine Corps,

or Public Health Service, engaged in the discharge of one’s official duty. Certification shall be on

forms prescribed by the Department of Taxation. (Section 235-1, HRS). See Tax Information

Releases No. 89-3 and 94-2 for more information.

Corporations, partnerships, or limited liability companies all of whose shareholders, partners,

or members are blind, deaf, or totally disabled may also qualify for general excise tax benefits.

The entity’s information should be completed on each shareholder’s, partner’s, or member’s

certification form.

HOW AND WHERE TO FILE

Submit the original and one copy of Form N-172 to the Hawaii Department of Taxation,

ATTN: Licensing Section, P.O. Box 259, Honolulu, HI 96809-0259. Corporations, partnerships,

or limited liability companies all of whose shareholders, partners, or members are blind, deaf, or

totally disabled are to submit all Forms N-172 at one time.

If you are submitting Form N-172 in response to having received a Department of Taxation

adjustment letter denying the disability exemption because no exemption is on file, please send a

copy of the adjustment letter along with the Form N-172 to the address shown above.

TAX BENEFITS

For information on tax benefits provided under the General Excise Tax and/or Income Tax

Laws, refer to Tax Information Release Nos. 89-3 and 94-2.

Instructions For Form N-172 - Department Of Taxation State Of Hawaii Page 2