EXCLUSIVE: Businesses, individuals complain about state tax payment backlog

Published: Mar. 7, 2014 at 9:22 AM HST
Email This Link
Share on Pinterest
Share on LinkedIn

HONOLULU (HawaiiNewsNow) - The most recent tax deadline was especially frustrating for Big Island resident Patrick Donovan, who said the state took more than five weeks to cash his check.

"I think it was kind of screwy ... that it was a helluva a way to run a business," the retired postal worker said.

"What are they doing sitting on this money? If you or I get a check in the mail, we don't put in a shoe box and stash it under the bed."

Donovan said he mailed the state a $5,200 check in early January for his estimated quarterly income taxes. But the state didn't deposit that check until late February.

"There's all kinds of money just hanging around going nowhere for the state. It could be put to use," Donovan said.

"It could be earning them money, they could be paying their bills."

Donovan is hardly the exception.

It usually takes about two weeks to process a tax payment. But businesses and individual taxpayers now complain that the state is taking five to six weeks.

"You can look at it like a symptom of they got so much money and they're overtaxing us so much that it's taking longer to do it," said state Sen. Sam Slom, R-Hawaii Kai.

"The Department of Tax has been a troubled department."

Tom Yamachika, interim president of the nonprofit Tax Foundation of Hawaii, said the problem is partly due to staffing shortages.

Many of the department employees have retired in recent months and the department hasn't been able to train their replacements fast enough.

"There's a tremendous vacancy rate at the Department of Taxation," he said.

"They don't have the people they need and as a result things are backing up."

A spokeswoman for the Tax Department said the state has been able to play catch up after hiring nearly 90 seasonal workers in the past two months.

"There was a higher volume in January when the taxpayer made the payments," said Mallory Fujitani, the department's public information officer.

"We apologize for any inconvenience."

Copyright 2014 Hawaii News Now. All rights reserved.