Hawaii R&D Tax Credit Filing Instructions

To claim the Research and Development (R&D) tax credit in Hawaii, businesses generally need to meet specific eligibility requirements, primarily being a “Qualified High Technology Business” (QHTB) as defined by Hawaii Revised Statutes Section 235-7.3(c). This typically means conducting over 50% of activities in qualified research within Hawaii, being registered to do business in the state, and having fewer than 500 employees. Taxpayers must first claim the federal R&D tax credit under IRC Section 41 for the same qualified research expenses (QREs) to be eligible for the Hawaii credit.

The process involves several steps:

• Certification from the Department of Business, Economic Development, and Tourism (DBEDT): Businesses must submit Form N-346A (Application for Certification of Tax Credit for Research Activities) to the DBEDT. This form, along with supporting documentation detailing the qualified research expenditures, is typically due by March 31st following the taxable year in which the research was conducted.
• Annual Survey: QHTBs claiming the credit are also required to complete and file an annual survey electronically with the DBEDT by June 30th of each calendar year following the calendar year in which the credit may be claimed. Failure to submit this survey can result in a waiver of the credit.
• Claiming the Credit on Tax Return: Once the DBEDT certifies the credit, they will issue a certificate. This certificate, along with Hawaii Form N-346 (Tax Credit for Research Activities) and a copy of the federal Form 6765 (Credit for Increasing Research Activities), must be attached to the taxpayer’s Hawaii income tax return (e.g., Form N-11 for individuals, N-20 for partnerships, N-35 for S corporations, etc.). The deadline to claim the credit, including amended claims, is generally 12 months after the close of the taxable year.

It’s important to note that the Hawaii R&D tax credit program was set to expire on December 31, 2024, unless further legislation was passed. Therefore, it is crucial to verify the current status of the program and any updated requirements with the Hawaii Department of Taxation or the DBEDT.

Hawaii Patent of the Year – 2024/2025

Nalu Scientific LLC has been awarded the 2024/2025 Patent of the Year for its breakthrough in high-speed data acquisition. Their invention, detailed in U.S. Patent No. 12052026, titled ‘System and method for high-sample rate transient data acquisition with pre-conversion activity detection’, introduces a novel approach to capturing fleeting events in scientific measurements.

This patented system enhances the precision of data collection by identifying and isolating significant signals before they undergo digital conversion. By focusing on these critical moments, the technology ensures that even the briefest occurrences are accurately recorded. This capability is particularly valuable in fields like particle physics and emerging technologies such as Lidar, where understanding rapid, transient events is crucial.

Traditional data acquisition methods often struggle to capture these swift phenomena due to limitations in sampling rates and detection capabilities. Nalu Scientific’s innovation addresses these challenges by integrating pre-conversion activity detection, allowing for high-resolution sampling without data loss. The system’s design not only improves the fidelity of measurements but also reduces overall system costs by streamlining the data acquisition process.

With applications spanning from advanced scientific research to industrial diagnostics, this technology represents a significant advancement in the field. Nalu Scientific’s invention promises to enhance the accuracy and efficiency of transient data acquisition, paving the way for deeper insights and innovations across various industries.