HRS §235-28
How patent and copyright royalties are assigned to Hawaii
This section says when patent and copyright royalties count as Hawaii income for tax purposes. It depends on where the payer uses the patent or copyright, and where you are based. If use can't be pinned to a state, it defaults to your main business location in Hawaii.
businesses
The statute, as written — Allocation of patent and copyright royalties
(a) Patent and copyright royalties are allocable to this State: (1) If and to the extent that the patent or copyright is utilized by the payer in this State, or (2) If and to the extent that the patent or copyright is utilized by the payer in a state in which the taxpayer is not taxable and the taxpayer's commercial domicile is in this State. (b) A patent is utilized in a state to the extent that it is employed in production, fabrication, manufacturing, or other processing in the state or to the extent that a patented product is produced in the state. If the basis of receipts from patent royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the patent is utilized in the state in which the taxpayer's commercial domicile is located. (c) A copyright is utilized in a state to the extent that printing or other publication originates in the state. If the basis of receipts from copyright royalties does not permit allocation to states or if the accounting procedures do not reflect states of utilization, the copyright is utilized in the state in which the taxpayer's commercial domicile is located.
LawTrove is not legal advice. The summary above is a computer-generated restatement — the authoritative text is the official version linked above.