§231-33 Tax debt due the State; lien. (a) Within the meaning of this section:
(1) The terms "mortgagee", "pledgee", and "purchaser" do not include any person to whom property or an interest in property is conveyed (A) as security for or in satisfaction of an antecedent or pre-existing debt of a debtor who is insolvent within the meaning of the Bankruptcy Act, or (B) as trustee, assignee, or agent for the benefit of one or more creditors, other than mortgage bondholders.
(2) The term "motor vehicle" means any self-propelled vehicle to be operated on the public highways.
(3) The interest of a party, if required to be recorded or entered of record in any public office in order to be valid against subsequent purchasers, does not arise prior to the time of such recording or entry of record.
(4) An employer or other person who is required by any tax law to withhold tax at the source, or to collect a tax, and who is made liable for the tax if the employer or other person does not fulfill the employer's or other person's duties in that regard, shall be deemed a person liable for the tax.
(5) The term "real property" includes leasehold or other interest in real property and also any personal property sold or mortgaged with real property if affixed to the real property and described in the instrument of sale or mortgage.
(b) Any state tax which is due and unpaid is a debt due the State and constitutes a lien in favor of the State upon all property and rights to property, whether real or personal, belonging to any person liable for the tax. The lien for the tax, including penalties and interest thereon, arises at the time the tax is assessed, or at the time a return thereof is filed, or at the time of filing by the department of taxation of the certificate provided for by subsection (f) whichever first occurs. From and after the time the lien arises it is a paramount lien upon the property and rights to property against all parties, whether their interest arose before or after that time, except as otherwise provided in this section.
(c) The lien imposed by subsection (b) is not valid as against:
(1) A mortgagee or purchaser of real property, or the lien of a judgment creditor upon real property, whose interest arose prior to the recording by the department of the certificate provided for by subsection (f);
(2) A mortgagee or purchaser of a motor vehicle who becomes the legal owner or owner at a time when the tax lien and encumbrance record provided for by section 286-46 does not show the lien.
(d) As to tangible personal property, possession of which is held by a person liable for tax for the purpose of sale to the public in the ordinary course of the person's business, the lien imposed by subsection (b) is extinguished as to any such property sold in the ordinary course of the business by or under the direction of the person to any purchaser for valuable consideration. As to securities, negotiable instruments, and money, the lien imposed by subsection (b):
(1) Is extinguished as to such property upon passage of title to a person without notice or knowledge of the existence of the lien, for an adequate and full consideration in money or money's worth;
(2) Is not valid as against a mortgagee or pledgee for an adequate and full consideration in money or money's worth, who is located outside the State and takes possession of the property, if at the time of taking possession of the property the mortgagee or pledgee is without notice or knowledge of the existence of the lien. The mere recording or filing of the certificate provided for by subsection (f) does not constitute notice for the purposes of this subsection.
(e) Subject to the provisions of this subsection, the lien imposed by subsection (b) is not valid as against a mortgagee, pledgee, or purchaser who gives notice to the department on a form prescribed by it of the mortgage, pledge, or purchase made or about to be made, with a description of the property encumbered or conveyed or proposed to be encumbered or conveyed thereby, and whose interest in the property arises prior to the recording or filing by the department of the certificate provided for by subsection (f) or within ten days after the filing. If the notice is given the lien imposed by subsection (b) is valid against the party giving the notice, as to any taxes set forth in a certificate filed as provided in subsection (f) within the period of fifteen days after the notice. The department may waive all or any part of the period herein allowed.
(f) The department may record in the bureau of conveyances at Honolulu, or in respect of a lien on a motor vehicle, file with the county director of finance, a certificate setting forth the amount of taxes due and unpaid, which have been returned, assessed, or as to which a notice of proposed assessment has issued. The certificate shall identify the taxpayer, the taxpayer's last known address, and the tax or taxes involved. The recording or filing of the certificate has the effect set forth in this section, but nothing in this section shall be deemed to require that a certificate recorded or filed by the department must include the amount of any penalty or interest, in order to protect the lien therefor. The certificate, if recorded or filed with the county director of finance, shall be entered of record as provided by law. Recordation of the certificate in the bureau of conveyances shall be deemed, at such time, for all purposes and without any further action, to procure a lien on land registered in the land court under chapter 501. Any cost incurred in the filing of the certificate shall be a part of the lien for the tax therein set forth.
(g) The department may issue a certificate of discharge of any part of the property subject to the lien imposed by this section, upon payment in partial satisfaction of such lien, of an amount not less than the value as determined by the department of the lien on the part to be so discharged, or if the department determines that the lien on the part to be discharged has no value. Any such discharge so issued shall be conclusive evidence of the discharge of the lien as therein provided.
(h) The lien imposed by subsection (b) may be foreclosed in a court proceeding or by distraint under section 231-25.
(i) This section shall not apply to a tax levied by a chapter which contains a specific provision for a lien for the tax levied by the chapter, any provision in this section to the contrary notwithstanding. [L 1957, c 185, §1; am L Sp 1959 2d, c 1, §16; am L 1963, c 104, §1; Supp, §115-37.5; am L 1966, c 33, §2; HRS §231-33; gen ch 1985; am L 1989, c 20, §1]
Case Notes
Federal court's equitable discretion to award attorney's fees to the interpleader stakeholder was not precluded by the statutory priority given by the state tax lien statute. 488 F. Supp. 2d 1084 (2007).
Pre-hearing tax lien does not violate due process. 57 H. 1, 548 P.2d 246 (1976).
Structure Hawaii Revised Statutes
231-1.5 Confidentiality privileges relating to taxpayer communications.
231-1.6 Personnel security program; criminal history record checks.
231-3 Department, general duties and powers.
231-3.1 Consideration paid not indicative of fair market value.
231-3.6 Streamlined sales and use tax agreement compliance.
231-4 Assessing officers eligible to appointment as collecting officers and vice versa.
231-4.3 Investigators; appointment and powers.
231-4.5 Administrative rules officer; specialists; appointment and duties.
231-5 Deceased officers, duties of personal representatives, etc.
231-6 Oath, power to administer.
231-7 Audits, investigations, hearings, and subpoenas.
231-7.5 Expedited appeals and dispute resolution program.
231-8 Timely mailing treated as timely filing and paying.
231-8.5 Electronic filing of tax returns.
231-9 Tax collection; general duties, powers of director; dollar rounding.
231-9.3 Tax collection; mainland contractors working on federal construction projects.
231-9.4 Credit or debit card remittances.
231-9.5 Assessment of additional taxes of corporations or partnerships.
231-9.6 Fiduciaries, liability.
231-9.7 Informalities not to invalidate assessments, mistakes in names or notices, etc.
231-9.9 Filing and payment of taxes by electronic funds transfer.
231-10 Department; keep offices where.
231-10.6 Rules or administrative guidance.
231-10.7 Temporary rulemaking authority for regulation of tax matters.
231-11 Police to aid assessing or collecting officers.
231-13 Director; examination, investigation, and collection.
231-15.3 Signature presumed authentic.
231-15.4 Tax return preparers; preparer tax identification number required.
231-15.5 Disclosure by return preparers.
231-15.7 Returns by fiduciaries.
231-15.8 Time for performing certain acts postponed by reason of service in combat zone.
231-18 Tax and other officials permitted to inspect returns; reciprocal provisions.
231-19.3 Disclosure of letter rulings, et al.
231-20 Evidence, tax records as.
231-21 Due date on Saturday, Sunday, or holiday.
231-21.5 Effect of civil union.
231-23 Adjustments and refunds.
231-24 Jeopardy assessments, etc.
231-26 Extraterritorial enforcement of tax laws.
231-27 Partial payment of taxes.
231-28 Tax clearance before procuring liquor licenses.
231-29 Joinder of party defendant when State claims tax liens.
231-30 Unknown or nonresident delinquents; procedure to collect taxes from.
231-32 Records of delinquent taxes, uncollectible delinquent taxes.
231-33 Tax debt due the State; lien.
231-34 Attempt to evade or defeat tax.
231-35 Wilful failure to file return, supply information, or secure a license.
231-36 False and fraudulent statements; aiding and abetting.
231-36.4 Wilful failure to collect and pay over tax.
231-36.5 Understatement of taxpayer's liability by tax return preparer.
231-36.6 Substantial understatements or misstatements of amounts; penalty.
231-36.7 Promoting abusive tax shelters.
231-36.8 Erroneous claim for refund or credit.
231-37 Neglect of duty, etc., misdemeanor.
231-39 Additions to taxes for noncompliance or evasion; interest on underpayments and overpayments.
231-40.5 Statute of limitations; extension for substantial omissions.
231-41 Statute of limitation for criminal penalties.
231-55 Finalization of setoff; credit on debt.
231-56 Charges for setoff; credit to agency.
231-57 Apportionment of joint refunds.
231-57.5 Notification of address and social security number of debtor parent.
231-61 Tax liens; co-owners' rights.
231-62 Tax liens; foreclosure; property.
231-63 Tax liens; foreclosure without suit, notice.
231-64 Tax liens; registered land.
231-65 Tax liens; notice, form of.
231-66 Tax liens; postponement of sale, etc.
231-67 Tax liens; tax deed; redemption.
231-70 Disposition of surplus moneys.
231-81 Special enforcement section; created.
231-82 Special enforcement section; functions, powers, and duties.
231-83 Investigators and personnel, appointment and power.
231-84 Right to inspection of books, records, and premises; warrants and writs; levy and seizure.
231-85 Identification of cash economy cases; retention of funds.
231-86 Violent interference with a tax official.
231-91 Citations for violations; deposits.
231-92 Cash-based businesses; injunction.
231-93 Cash-based business; defined.
231-94 Failure to produce license upon demand.
231-95 Failure to keep adequate books and records.
231-96 Failure to record transaction.
231-98 Tax avoidance price fixing.