Harry H. Ikeda, a Lihu‘e barber who believes that the state excise tax is unjust and unconstitutional, says that he will be continuing his war with the state government after the state Immediate Court of Appeals upheld a decision against him last month.
“They will get egg on the face,” said Barbara Oki, Ikeda’s sister and operator of the Oki Diner on Kuhio Highway in Lihu‘e.
Ikeda was charged in February 2001 with three counts of violating Hawaii Revised Statues section 231-35 for failing to secure a general excise tax license and willfully failing to file his general excise tax returns for 1998 and 1999. He was convicted and sentenced in January 2002 to one year in jail. All but 45 days were suspended, and he was ordered to pay a fine of $25,000, with $10,000 suspended for a year.
He said yesterday that he will be filing a Writ of Certiorari with the state Supreme Court asking the court for a grant review of a grave error of law.
Ikeda said he believes that he was charged with the wrong crime.
“Although the Court of Appeals agreed with the District Court that I was required to get a GE license, the court failed to notice plain error that I was charged under the wrong law, HRS 231-35 instead of 237-46, the general excise tax law, which is strictly civil, which means no prison or fines,” Ikeda said in a written statement sent to The Garden Island.
Ikeda canceled his excise tax license when he found out that the United States Supreme Court had declared that an individual person was not required to have the license, his sister said. He wrote to the state to get a clarification on the ruling, and when the state did not answer him, he canceled his license.
“The state’s own GE tax filing instruction booklet clearly states that this GE privilege tax is for legal entities, defined by the law dictionary as an ‘organization’ and not a natural person, like you and me. Hawai‘i is the only state in the union that has a general excise tax law vague enough to trick the small, private, incorporated ‘mom-and-pop’ outlets into believing they are mandated to participate,” said Ikeda.
The state Attorney General’s Office, on the other hand, has filed a letter to the 5th Circuit Court on Kaua‘i to enforce the judgment of the District Court in January 2002. “We’re just waiting for a court date,” said Lawrence Goya, senior deputy attorney General for Hawai‘i.
Ikeda spent five days in jail when the ruling came down last year, before filing his appeal, his sister said. If his appeal is denied, he will be forced to finish the rest of his sentence, including serving the jail time and paying the fine.
“The state Supreme Court already sent it to the lower court for an opinion. And the court held there is no basis for his argument,” said Stephen Hironaka, criminal tax investigator for the state.
Ikeda does have the right to file the writ, Goya said. And “typically the answer comes back pretty quickly,” he said. He would not comment, however, on the specifics of Ikeda’s case.
“I believe the state intentionally and wrongfully charged me to degrade me before the community to send a forceful message to the small private services and business people to pay a ‘voluntary’ tax,” said Ikeda. “But, like me, they too have the God-given right to work for a living without government trying to license it just to extort a percentage of hard earnings.”
“Like Yogi Berra once said, ‘It ain’t over till it’s over,'” Ikeda wrote.
