It depends, but probably. Although the business is formed in California, you would have a filing requirement in Hawaii if you have a business nexus there. Your business can be considered to have a nexus in Hawaii if it is generating income from Hawaii.
Hawaii will not assess a corporate tax on the business, however, because it follows the Federal treatment of the pass-through nature of the business income. Your partner/shareholder who lives in Hawaii will be responsible for the Hawaii income tax on the pass-through income on his personal tax return.
For this reason, it is probably a good idea to fulfill a Hawaii return on behalf of this shareholder, especially if his/her income is not California sourced. It can assist the shareholder to not have to file additional state tax returns on the personal return.
**Say "Thanks" by clicking the thumb icon in a post
**Mark the post that answers your question by clicking on "Mark as Best Answer"
