HARPTA for Military Home Sellers
Updated: Oct 17, 2019
For members of the military stationed in Hawaii, there are two terms that are important to understanding how you are taxed:
1. Your Home of Record - It's the address the military recorded as your home when you enlisted, commissioned or were ordered for duty. It's usually what service members claim as their home when they move from place to place on military orders. Barring extraordinary circumstances, a service member cannot change their home of record.
2. Your State of Legal Residency - Although military service members usually claim their home of record as their state of legal residency, it doesn't have to be the case.
A military service member may change their state of legal residency if they receive approval via Department of Defense Form 2058.
The state of legal residency is the state where the service member pays income tax (if applicable) on their military income.
If the service member declares a state other than Hawaii as their state of legal residency, they are not automatically excluded from HARPTA. That doesn't necessarily mean they'll have HARPTA withheld - it just means that they need to apply for a waiver and it must be accepted by the State of Hawaii. (See Hawaii Tax Information Release (T.I.R.) 2017-01 for example)
If you are a military home seller who has used your Hawaii home as your principal residence, please contact us to see if we can help you obtain a HARPTA waiver.