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There may be a withholding tax if the seller of real estate realizes a taxable gain and is a non-U.S. taxpayer or a non-Hawaii resident.
Non-U.S. taxpayers are required according to FRPTA (I.R.C.§897(a)) to withhold 9% of the amount realized on the sale. Non-Hawaii taxpayers are required according to HARPTA ( §235 - 68 H.R.S.) to withhold 5% of the amount realized on the sale.
The withholding requirements contain important exceptions and conditions.
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