posted 06-19-2002 12:27            

FIRPTA = (Federal) Foreign Investment in Real Property Tax Act
HARPTA = Hawaii Real Property Tax Act

US residents don't need to worry about FIRPTA, as far as I know.

If I understand this correctly, HARPTA provides for the buyer to withhold 5% from the Non-Hawaiian seller's proceeds and provide it to the state. So it's not REALLY a tax, exactly, but rather is witholding against taxes due on the profit from the sale. To get it back, you'd have to file with the state of Hawaii, just as you would with your own state to get back any witholding not used up by taxes due.

You can be exempted from this withholding if you can provide sufficient proof to the buyer that no taxes will be due the state from this sale.

One way to provide this proof is to file Hawaii form N-288 B with the state prior to the sale and receive a statement back from the state that no taxes will be owed on the sale. This statement should be sufficient proof to the buyer that he doesn't have to mess with this either, for which he should be grateful. Reportedly it takes 2-5 weeks to process the form, so it may be too late for you to take advantage of it, but it might not be a bad thing for any of us who are contemplating selling a HI timeshare in the future to grab a copy of NOW.

Here's the link with the best explanation I found. There's a link there to a downloadable copy of form N-288B in pdf format.