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INSTRUCTIONS 
FORM N-756                                  STATE OF HAWAII - DEPARTMENT OF TAXATION 
(REV. 2023)                                 INSTRUCTIONS FOR FORM N-756 
                                            ENTERPRISE ZONE TAX CREDIT

                                                                                               Third year          60% of premiums paid
GENERAL INSTRUCTIONS                                                                           Fourth year         50% of premiums paid
PURPOSE OF FORM                                                                                Fifth year          40% of premiums paid
Use  Form  N-756  to  figure  and  claim  the  enterprise  zone  income  tax                   Sixth year          30% of premiums paid
credit under section 209E-10, Hawaii Revised Statutes (HRS).                                   Seventh year        20% of premiums paid
WHO MAY CLAIM THIS CREDIT                                                             Qualified businesses engaged in the manufacturing of tangible personal 
                                                                                      property or the producing or processing of agricultural products may con-
A qualified business that has received certification from the Department              tinue to claim the credit in an amount equal to 20% of the premiums paid 
of Business, Economic Development & Tourism (DBEDT) may claim the                     during each of the subsequent three tax years.
enterprise zone tax credit.
                                                                                      The enterprise zone tax credit shall apply only to the extent that a quali-
The amount of the credit is determined by applying a percentage based                 fied business conducts trade or business within the zone.  A business which 
on the cycle year to: (a) the taxpayer’s Hawaii income tax liability attrib-          has income taxable both within and outside Hawaii shall apportion and allo-
utable to its enterprise zone activity, and (b) the taxpayer’s share of un-           cate the business’ net income under sections 235-21 to 235-39, HRS, prior 
employment insurance premiums paid for employees employed within the                  to calculating the enterprise zone tax credit.
enterprise zone.  The Enterprise Zone Tax Credit is nonrefundable and 
limited to the taxpayer’s tax liability from taxable income attributable              DEFINITIONS
to the conduct of business within an enterprise zone.  Any unused                     “Trade or business” means all business activity by a qualified business 
credit may not be carried over or carried back to another tax period.                 within an enterprise zone, whereby 1) tangible personal property is sold at 
(Section 209E-10, HRS).                                                               wholesale and the sale takes place within the zone, 2) a qualified business 
FLOW-THROUGH ENTITIES                                                                 engages in a service business within the zone, or 3) value is added to mate-
                                                                                      rials or products that are manufactured within the zone.  “Trade or business” 
If you are a flow-through entity that is allocating this credit to your part-         also includes engaging in producing agricultural products where the busi-
ners, shareholders, or beneficiaries, complete Part I, lines 2, 4, and 5, and         ness is a producer as defined in section 237-5; engaging in research, devel-
Part II, line 8 (if applicable), or Part III, line 11 (if applicable) of Form N-756.  opment, sale or production of all types of genetically-engineered medical, 
Each partner, S corporation shareholder, or beneficiary of an estate or trust         agricultural, or maritime biotechnology products; and engaging in producing 
(member) that has been certified shall separately determine for the mem-              electric power from wind energy for sale primarily to a public utility company 
ber’s taxable year within which the business’ taxable year ends, the mem-             for resale to the public.
ber’s share of the credit.  The member’s share of the entity’s net income or 
loss and unemployment insurance credit shall be determined in accordance              “Service business”  means  any  corporation,  partnership,  or  sole  pro-
with the ratio in which the members divide the profits and losses of the              prietorship that repairs ships, aircraft, or assisted technology equipment, 
partnership, S corporation, estate or trust respectively.  The flow-through           provides telecommunication services, information technology design and 
entity must provide a separate Form N-756A to each member to report the               production services, medical and health care services, or education and 
member’s share of the entity’s net income and unemployment insurance                  training services as defined in Chapter 209E, HRS.
premiums paid relating to the credit.  The flow-through entity must also pro-         Tangible personal property shall be sold at wholesale at an establish-
vide a copy of the certification issued by DBEDT to each member, which                ment of a qualified business located within an enterprise zone.  The transfer 
must be filed with their income tax return.                                           of title to the buyer of the tangible personal property shall take place in the 
CREDIT REQUIREMENTS                                                                   same enterprise zone in which the tangible personal property is sold.
To claim this credit, you must complete and attach to your Hawaii in-                 Services shall be sold at an establishment of a qualified business en-
come tax return:                                                                      gaged in a service business within an enterprise zone and the services shall 
                                                                                      be delivered in the same enterprise zone in which the services are sold.  
1. Form N-756                                                                         Where the service business, in the same transaction, engages in both the 
2. Schedule CR (For tax returns for which Schedule CR is required)                    sale of tangible property and services, the service business shall segregate 
                                                                                      the sale of services from the sale of tangible personal property.
3. Form N-756A (Required only if you are receiving this credit from a  
         flow-through entity)                                                         Value must be added to materials or products that are manufactured 
                                                                                      within the enterprise zone.
4. Credit certification letter from DBEDT.
A business that has been certified is entitled, subject to the apportion-             MULTIPLE FORM N-756AS
ment provisions, to an enterprise zone tax credit against Hawaii income tax           If you have more than one Form N-756A, submit one Form N-756 to 
under chapter 235, HRS, according to the following formula:                           include all N-756As in the computations.
            First year        80% of tax due
            Second year       70% of tax due                                          SPECIFIC INSTRUCTIONS
            Third year        60% of tax due
            Fourth year       50% of tax due                                          Note: If you are only claiming your share of the enterprise zone tax credit 
                                                                                      from a partnership, S corporation, estate, or trust, complete Part I, lines 2, 
            Fifth year        40% of tax due                                          4, and 5, and Part II, line 8 (if applicable), or Part III, line 11 (if applicable).
            Sixth year        30% of tax due
            Seventh year      20% of tax due                                          PART I
Qualified businesses engaged in the manufacturing of tangible personal                Complete this part to determine the taxpayer’s Hawaii income tax liabil-
property or the producing or processing of agricultural products may con-             ity attributable to its enterprise zone activity and its share of unemployment 
tinue to claim the credit in an amount equal to 20% of the taxes due during           insurance  premiums  paid  for  employees  employed  within  the  enterprise 
each of the subsequent three tax years.                                               zone.  Then go to either Part II or Part III, whichever is applicable.
In addition, a business that has been certified is entitled, subject to the           Line 1. — Enter the total tax liability from Form N-11, line 27; Form N-15, 
apportionment provisions, to an enterprise zone tax credit against Hawaii             line 44; Form N-30, Schedule J, line 24;  Form N-70NP, line 16; or Form 
income tax under chapter 235, HRS, in an amount equal to a percentage of              N-40, Schedule G, line 1 whichever is applicable.  (Note:  For Forms N-11 
unemployment insurance premiums paid on the payroll of all the business’              and N-15, do not include the separate tax from Forms N-2, N-103, N-152, 
employees employed in the enterprise zone, according to the following for-            N-168, N-312, N-325, N-338, N-344, N-348, N-405, N-586, N-615, or N-814 
mula:                                                                                 in your total tax liability.)
            First year        80% of premiums paid
            Second year       70% of premiums paid

Instructions for Form N-756 
(REV. 2023)                                                                                                                                          Page 2
Line 2a. — Enter the total gross income of the qualified business from trade  the amount from Form N-756A, line 3e, on line 6.  On the dotted line next to 
or business within the zone during the taxable year.  Gross income from       line 6, write “From Form N-756A” and go to line 7. 
trade or business within the zone is received when tangible personal prop-
erty is sold at wholesale to business firms, a qualified business engages     Line 5a. — Enter the total payroll for employees employed within the zone 
in a service business, or value is added to materials or products that are    during the taxable year.  Caution:  The determination of “employees em-
manufactured by a qualified business.                                         ployed within the zone” is different than the increase in employees required 
                                                                              in determining the eligibility for the income tax credit as set by the Depart-
For an individual operating as a sole proprietorship, enter the amount        ment of Business, Economic Development, and Tourism.  In order to qualify 
of the business’ net income which is attributable to the conduct of trade or  for  the  income  tax  benefits,  an  employee’s  services  to  the  EZ  company 
business within the zone.  This is calculated by multiplying the business’    must be: 1) performed entirely within enterprise zones in the same county 
net income by a fraction; the numerator being the total gross receipts of the that the company has been qualified in, or 2) the individual’s service must 
trade or business within the zone and the denominator being the total gross   be  performed  both  within  and  outside  enterprise  zones  within  the  same 
receipts of the business within Hawaii.                                       county, but the service performed outside of enterprise zones in the same 
                                                                              county is only incidental to the individual’s service within the zones.
Members should enter the amount from Form N-756A, line 2e.
Line 2b. — Enter the total gross income of the qualified business within      Line 5b. — Enter the total payroll for all employees within Hawaii.
Hawaii during the taxable year, including sales within and outside the en-    Part II 
terprise zone.  A business is taxable outside the enterprise zone if the busi-
ness has: 1) income from business activity within the zone which does not     Complete this part if your 7 or 10-year cycle began at the start of your tax-
fall within the definition of trade or business, or 2) income from business   able year, skip Part III, and go to Part IV.  If your 7 or 10-year cycle began 
activity conducted outside the zone.  This term includes work that a busi-    during your taxable year, then skip Part II and go to Part III.
ness located within a zone subcontracts to a business located outside the 
zone and the work is delivered outside the zone.                              Part III 
For an individual, enter the total gross income required to be reported to    Complete this part if your 7 or 10-year cycle began during your taxable year 
Hawaii, including your business’s net income (if operating as a sole propri-  rather than at the start of your taxable year and then go to Part IV. 
etorship), salary, interest income, dividend income, etc.
                                                                              Part IV 
Members should include in the total amount reported on line 2b, the 
amount from Form N-756A, line 2a.                                             Complete this part to determine your allowable credit.  
Line 4. — Enter the total amount of unemployment insurance premiums           Line 18. —  Divide line 2a from Form N-756 by the total Hawaii income 
paid on the payroll of all the business’ employees employed in Hawaii.        from Form N-11, line 20; Form N-15, line 35 column b; Form N-30, 
                                                                              Schedule J, line 4; Form N-70NP, line 6; or Form N-40, line 9, whichever 
Members claiming their share of the entity’s unemployment insurance           is applicable.
premiums paid within the zone should skip lines 4, and 5a - 5c; and enter 
                                                                 CREDIT WORKSHEET
                                                 Tax Credit                               Amount
                                        a.  Credit for Low-Income 
                                           Household Renters .........
                                        b.  Credit for Child and 
                                           Dependent Care Expenses
                                        c.  Credit From a Regulated 
                                           Investment Company .......
                                        d.  Fuel Tax Credit for 
                                           Commercial Fishers ........
                                        e.  Credit for Child Passenger 
                                           Restrain Systems ..........
                                        f. Capital Goods Excise Tax 
                                           Credit  ...................
                                        g.  Motion Picture, Digital 
                                           Media and Film Production 
                                           Income Tax Credit ..........
                                        h.  Refundable Food/Excise 
                                           Tax Credit ................
                                        i. Renewable Energy 
                                           Technologies Income Tax 
                                           Credit (Refundable)  ........
                                        j. Tax Credit for Research 
                                           Activities .................
                                        k.  Earned Income Tax Credit 
                                           (Refundable) ..............
                                        l. Important Agricultural Land 
                                           Qualified Agricultural Cost 
                                           Tax Credit ................
                                        m.  Renewable Fuels 
                                           Production Tax Credit 
                                           (Refundable) ..............
                                        n.  Income Taxes Paid to 
                                           Another State or Foreign 
                                           Country ..................
                                        o.  Add lines a through n. 
                                           Enter the amount here and 
                                           on line 16. ................