N-312: Capital Goods Excise Tax Credit (Revision 2020)

Who files this form

Use Form N-312 to claim Hawaii’s Capital Goods Excise Tax Credit. Part II is used to calculate recapture of the credit when property ceases to be eligible.

The form lists these returns for attachment: F-1, N-11, N-15, N-20, N-30, N-35, N-40, and N-70NP. The form alone does not provide complete eligibility rules.

When it's due

The deadline to claim the credit, including an amended claim, is 12 months after the close of the taxable year for which you are claiming it.

An extension to file your return does not extend the deadline to claim this credit. No year-specific calendar deadline is printed on the form.

What you'll need

Have the following information ready:

• Name as shown on your tax return, SSN or FEIN, and Hawaii Tax Identification Number.
• Descriptions of qualifying property, dates placed in service, and qualifying costs, separated into Hawaii purchases and purchases from out-of-state sellers.
• Whether 4% use tax was paid on out-of-state purchases.
• Sales or use taxes paid to another state or jurisdiction for which you claimed a credit under section 238-3(i), Hawaii Revised Statutes.

Attach a separate sheet if you need more room to describe property. If you answer “Yes” to any of questions A through E, attach an explanation of how you determined the qualifying basis and identify the affected property using the applicable letters.

For recapture in Part II, you will also need the property’s relevant dates, original apportioned costs and deductions, and original or previously recomputed credit amounts.

How to file

Attach Form N-312 to Form F-1, N-11, N-15, N-20, N-30, N-35, N-40, or N-70NP, as applicable.

In Part I, list qualifying property and costs, multiply the total qualifying cost by 4%, and subtract the amount on line 6 to calculate the credit. Transfer the credit to the appropriate credit line on Form F-1, Schedule I, or Schedule CR, as directed on line 7.

If completing Part II, transfer line 13 to the applicable recapture or tax line identified on the form.

The form says to read the separate instructions before completing it. Those instructions were not provided here. The supplied text does not give a mailing address or e-filing directions.

Common mistakes

• Assuming a filing extension extends the credit deadline. It does not. The 12-month deadline also applies to amended claims.
• Claiming overlapping credits. You cannot claim this credit for property for which the Motion Picture, Digital Media, and Film Production Income Tax Credit is claimed, or for any cost used to claim the Renewable Energy Technologies Income Tax Credit.
• Overlooking the credit’s tax treatment. The amount allowed and claimed must be treated as taxable income in the year properly recognized under your accounting method. Alternatively, reduce the eligible property’s depreciation basis for state income taxes by that amount.
• Omitting a required explanation. A “Yes” answer to any question A through E requires an explanation of the qualifying basis and identification of the affected property.

Questions people ask

What credit percentage is printed on the form?

Part I, line 4 shows 4%. Line 6 then subtracts certain sales or use taxes paid to another state or jurisdiction for which a credit was claimed.

Do I need to report out-of-state purchases separately?

Yes. List them on line 2a and answer whether 4% use tax was paid by checking “Yes,” “No,” or “Some” on line 2b.

What if I need more room to list property?

Attach a separate sheet. Both Part I and Part II allow this for property descriptions.

Should I round the amounts?

Part I, line 7 directs individual taxpayers to round the credit to the nearest dollar. Part II, line 13 directs filers to round the total increase in tax to the nearest dollar.

Official sources

• https://files.hawaii.gov/tax/forms/current/n312_i.pdf