GENERAL EXCISE TAX LAW CHAPTER 237, Page 1 (Unofficial Compilation) CHAPTER 237 GENERAL EXCISE TAX LAW Definitions; Administration Section 237-1 Definitions 237-2 “Business”, “engaging” in business, defined 237-3 “Gross income”, “gross proceeds of sale”, defined 237-4 “Wholesaler”, “jobber”, defined 237-5 “Producer” defined 237-6 “Contractor”, “contracting”, “federal cost-plus contractor”, defined 237-7 “Service business or calling”, defined 237-8 Administration and enforcement by department 237-8.5 Repealed 237-8.6 County surcharge on state tax; administration Licenses; Tax; Exemptions 237-9 Licenses; penalty 237-9.3 General excise tax benefits; denial of tax benefits for failure to properly claim 237-9.5 No separate licensing, filing, or liability for certain revocable trusts 237-10 Repealed 237-10.5 Reporting requirement for contractors on federal construction projects 237-11 Tax year 237-12 Tax cumulative; extent of license 237-13 Imposition of tax 237-13.3 Repealed 237-13.5 Assessment on generated electricity 237-13.8 Sales of telecommunications services through prepaid telephone calling service 237-14 Segregation of gross income, etc., on records and in returns 237-14.5 Segregation of gross income, etc., on records and in returns of telecommunications businesses 237-15 Technicians 237-16 Repealed 237-16.5 Tax on written real property leases; deduction allowed 237-16.8 Exemption of certain convention, conference, and trade show fees 237-17 Persons with impaired sight, hearing, or who are totally disabled 237-18 Further provisions as to application of tax 237-19 Repealed 237-20 Principles applicable in certain situations 237-21 Apportionment 237-22 Conformity to Constitution, etc. 237-23 Exemptions, persons exempt, applications for exemption 237-23.5 Related entities; common paymaster; certain exempt transactions 237-24 Amounts not taxable 237-24.3 Additional amounts not taxable 237-24.5 Additional exemptions 237-24.7 Additional amounts not taxable 237-24.75 Additional exemptions 237-24.8 Amounts not taxable for financial institutions 237-24.9 Aircraft service and maintenance facility 237-25 Exemptions of sales and gross proceeds of sales to federal government, and credit unions 237-26 Exemption of certain scientific contracts with the United States 237-27 Exemption of certain petroleum refiners 237-27.1 Repealed
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GENERAL EXCISE TAX LAW
CHAPTER237,Page1(UnofficialCompilation)
CHAPTER 237GENERAL EXCISE TAX LAW
Definitions;Administration
Section237-1 Definitions237-2 “Business”, “engaging” in business, defined237-3 “Gross income”, “gross proceeds of sale”, defined237-4 “Wholesaler”, “jobber”, defined237-5 “Producer” defined237-6 “Contractor”, “contracting”, “federal cost-plus contractor”, defined237-7 “Service business or calling”, defined237-8 Administration and enforcement by department237-8.5 Repealed237-8.6 County surcharge on state tax; administration
Licenses;Tax;Exemptions
237-9 Licenses; penalty237-9.3 General excise tax benefits; denial of tax benefits for failure to properly claim237-9.5 No separate licensing, filing, or liability for certain revocable trusts237-10 Repealed237-10.5 Reporting requirement for contractors on federal construction projects237-11 Tax year237-12 Tax cumulative; extent of license237-13 Imposition of tax237-13.3 Repealed237-13.5 Assessment on generated electricity237-13.8 Sales of telecommunications services through prepaid telephone calling service237-14 Segregation of gross income, etc., on records and in returns237-14.5 Segregation of gross income, etc., on records and in returns of telecommunications businesses237-15 Technicians237-16 Repealed237-16.5 Tax on written real property leases; deduction allowed237-16.8 Exemption of certain convention, conference, and trade show fees237-17 Persons with impaired sight, hearing, or who are totally disabled237-18 Further provisions as to application of tax237-19 Repealed237-20 Principles applicable in certain situations237-21 Apportionment237-22 Conformity to Constitution, etc.237-23 Exemptions, persons exempt, applications for exemption237-23.5 Related entities; common paymaster; certain exempt transactions237-24 Amounts not taxable237-24.3 Additional amounts not taxable237-24.5 Additional exemptions237-24.7 Additional amounts not taxable237-24.75 Additional exemptions237-24.8 Amounts not taxable for financial institutions237-24.9 Aircraft service and maintenance facility237-25 Exemptions of sales and gross proceeds of sales to federal government, and credit unions237-26 Exemption of certain scientific contracts with the United States237-27 Exemption of certain petroleum refiners237-27.1 Repealed
GENERAL EXCISE TAX LAW
CHAPTER237,Page2(UnofficialCompilation)
237-27.5 Air pollution control facility237-27.6 Solid waste processing, disposal, and electric generating facility; certain amounts exempt237-28 Repealed237-28.1 Exemption of certain shipbuilding and ship repair business237-28.2 Repealed237-29 Exemptions for certified or approved housing projects237-29.5 Exemption for sales of tangible personal property shipped out of the State237-29.53 Exemption for contracting or services exported out of State237-29.55 Exemption for sale of tangible personal property for resale at wholesale237-29.6 Repealed237-29.65 Repealed237-29.7 Exemption of insurance companies237-29.75 Repealed237-29.8 Call centers; exemption; engaging in business; definitions237- Temporarysuspensionofexemptionofcertainamounts;levyoftax (temporary uncodified section)237- Informationreporting (temporary uncodified section)
ReturnsandPayments
237-30 Monthly, quarterly, or semiannual return, computation of tax, payment237-30.5 Collection of rental by third party; filing with department; statement required237-31 Remittances237-32 Penalties237-33 Annual return, payment of tax237-33.5 Federal assessments; adjustments of gross income or gross proceeds of sale; report to the department237-34 Filing of returns; disclosure of returns unlawful, penalty; destruction of returns237-35 Consolidated reports; interrelated business
Assessments,Refunds,andRecords
237-36 Erroneous returns, disallowance of exemption, payment237-37 Refunds and credits237-38 Failure to make return237-39 Audits; procedure, penalties237-40 Limitation period237-41 Records to be kept; examination237-41.5 Certain amounts held in trust; liability of key individuals
Appeals
237-42 Appeals237-43 Bulk sales; transfers; penalties237-44 Entertainment business237-45 Repealed237-46 Collection by suit; injunction237-47 District judges; concurrent civil jurisdiction in tax collections
(1) That individualmembers shall be afforded freedom of choice in the selection of their own attorney orattorneystoprovidelegalservicesundertheplan;and
(2) For thepaymentofequalamountsfor thecostofservicesrenderedwithoutregardto theidentityof theattorneyorattorneysselectedbytheplanmemberormembers.Noplanshallotherwisediscriminateonthebasisoftheselection.
“Overhead”meanscontinuousorgeneral costsoccurring in thenormalcourseofabusiness, includingbutnotlimitedtocostsforlabor,rent,taxes,royalties,interest,discountspaid,insurance,lighting,heating,cooling,accounting,legalfees,equipmentandfacilities,telephonesystems,depreciation,andamortization.
“Retailing” or “sales at retail” includes the sale of tangible personal property for consumption or use by thepurchaserandnotforresale,therentingoftangiblepersonalproperty,andtherenderingofservicesbyoneengagedinaservicebusinessorcalling,asdefinedinsection237-7,toapersonwhoisnotpurchasingtheservicesforresale.Personsdescribedinthisdefinitionare“retailers”.
Agreementofsaleexecutedbyapartnershipdealinginlandwasnota“casualsale”.Att.Gen.Op.62-1.Co-opapartment corporationoperatingandmanagingapartmentbuilding is engaged inbusiness and is taxableon its receiptsofmonthly
(b) Thewords“grossincome”and“grossproceedsofsales”shallnotbeconstruedtoinclude:grossreceiptsfromthesaleofsecuritiesasdefinedin15UnitedStatesCodesection78corsimilarlawsofjurisdictionsoutsidetheUnitedStates,contractsforthesaleofacommodityforfuturedeliveryandotheragreements,options,andrightsasdefinedin7UnitedStatesCodesection2thatarepermittedtobetradedonaboardoftradedesignatedbytheCommoditiesFuturesTradingCommission under theCommodityExchangeAct, or evidence of indebtedness or,exceptasotherwiseprovided,fromthesaleoflandinfeesimple,improvedorunimproved,dividendsasdefinedbychapter235;cashdiscountsallowedandtakenonsales;theproceedsofsaleofgoods,wares,ormerchandisereturnedbycustomerswhenthesalepriceisrefundedeitherincashorbycredit;orthesalepriceofanyarticleacceptedaspartpaymentonanynewarticlesold,ifthefullsalepriceofthenewarticleisincludedinthe“grossincome”or“grossproceedsofsales”;grossreceiptsfromthesaleortransferofmaterialsorsupplies,interestonloans,ortheprovisionofengineering,construction,maintenance,ormanagerialservicesbyone“member”ofan“affiliatedpublicservicecompanygroup”toanother“member”ofthesamegroupassuchtermsaredefinedinsection239-2.Accountsfoundtobeworthlessandactuallychargedoffforincometaxpurposesmaybededucted,atcorrespondingperiods,fromgrossproceedsofsale,orgrossincome,withinthischapter,sofarastheyreflecttaxablesalesmade,orgrossincomeearned,afterJuly1,1935,butshallbeaddedtogrossproceedsofsaleorgrossincomewhenandifafterwardscollected.
TaxInformationReleaseNo.42-74,“ApplicationoftheGeneralExciseTaxtoInterestIncome”Tax InformationReleaseNo.82-5, “TaxabilityofRebatesonAutomobilesSoldUnderManufacturer/DealerSales IncentivePrograms for
TaxLaw,andRentalMotorVehicleandTourVehicleSurchargeTaxLaw”TaxInformationReleaseNo.94-1,“TaxationofInterestIncomeEarnedbyTrustsUndertheHawaiiGeneralExciseTaxLaw”Tax InformationReleaseNo. 94-4, “Application of StateTaxes onRebates for the Purchase and Installation ofUltra-low FlushToilets”
(5) Salestoalicensedproducer,ortoacooperativeassociationdescribedinsection237-23(a)(7)forsaletoalicensedproducer,or toa licensedpersonoperatingafeedlot,ofpoultryoranimalfeed,hatchingeggs,semen, replacement stock, breeding services for the purpose of raising or producing animal or poultryproductsfordispositionasdescribedinsection237-5orforincorporationintoamanufacturedproductasdescribedinparagraph(2)orforthepurposeofbreeding,hatching,milking,oregglayingotherthanforthecustomer’sownconsumptionofthemeat,poultry,eggs,ormilksoproduced;providedthatinthecaseofafeedlotoperator,onlythesegregatedcostofthefeedfurnishedbythefeedlotoperatoraspartofthefeedlotoperator’sservicetoalicensedproducerofpoultryoranimalstobebutcheredortoacooperativeassociationdescribedinsection237-23(a)(7)ofsuchlicensedproducersshallbedeemedtobeasaleatwholesale;andprovidedfurtherthatanyamountderivedfromthefurnishingoffeedlotservices,otherthanthesegregatedcostoffeed,shallbedeemedtaxableattheservicebusinessrate.Thisparagraphshallnotapplytothesaleoffeedforpoultryoranimalstobeusedforhauling,transportation,orsportspurposes;
(7) Salestoalicensedproducer,ortoacooperativeassociationdescribedinsection237-23(a)(7)forsaletosuchproducer; of polypropylene shade cloth; of polyfilm; of polyethylene film; of cartons and such othercontainers,wrappers,andsacks,andbinders tobeusedforpackagingeggs,vegetables,fruits,andotheragriculturalandaquaculturalproducts;ofseedlingsandcuttingsforproducingnurseryplantsoraquaculturalproducts;orofchickcontainers;whichcartonsandsuchothercontainers,wrappers,andsacks,binders,seedlings,cuttings,andcontainersaretobeusedasdescribedinsection237-5,ortobeincorporatedinamanufacturedproductasdescribedinparagraph(2);
of a licensed seller for the purpose of rendering another service in the course of the seller’sservicebusinessorcalling,includingadealer’sfurnishingofgoodsorservicestothepurchaseroftangiblepersonalpropertytofulfillawarrantyobligationofthemanufactureroftheproperty;
(iii)Inthecontextofaservices-to-contractingtransaction,aserviceisrenderedupontheorderorrequest of a licensed contractor as defined in section 237-6 for the purpose of assisting thatlicensedcontractor;or
(iv)Inthecontextofaservices-to-transientaccommodationsrentaltransaction,aserviceisrenderedupon theorderor requestofapersonsubject to taxundersection237D-2for thepurposeoffurnishingtransientaccommodations;
(F) The resale of the service, tangible personal property, contracting, or transient accommodations issubjecttothetaximposedunderthischapteratthehighesttaxrate.
(12)Salestoalicensedretailmerchant,jobber,orotherlicensedselleroftangiblepersonalpropertythatwillbeincorporatedorprocessedbythelicensedretailmerchant,jobber,orotherlicensedsellerintoafinishedorsaleable product during the course of its preparation for market (including disposable, nonreturnablecontainers,packages,orwrappers,inwhichtheproductiscontainedandthataregenerallyknownandmostcommonlyusedtocontainfoodorbeveragefortransferordelivery),andwhichfinishedorsaleableproductistobesoldandnototherwiseusedbythelicensedretailmerchant,jobber,orotherlicensedseller;
(ii)In the context of an amusement-to-tangible personal property transaction, an amusement isrenderedupontheorderorrequestofalicensedsellerforthepurposeofsellingtangiblepersonalproperty;or
(b) Iftheusetaxlawisfinallyheldbyacourtofcompetentjurisdictiontobeunconstitutionalorinvalidinsofaras it purports to tax theuseor consumptionof tangiblepersonalproperty imported into theState in interstateorforeigncommerceorboth,wholesalersandjobbersshallbetaxedthereafterunderthischapterinaccordancewiththefollowingdefinition(whichshallsupersedetheprecedingparagraphotherwisedefining“wholesaler”or“jobber”):“Wholesaler”or“jobber”meansaperson,oradefinitelyorganizeddivisionthereof,definitelyorganizedtorenderandrenderingageneraldistributionservicethatbuysandmaintainsattheperson’splaceofbusinessastockorlinesofmerchandisethatthepersondistributes;andthattheperson,throughsalespersons,advertising,orsalespromotiondevices,sellstolicensedretailers,toinstitutionalorlicensedcommercialorindustrialusers,inwholesalequantitiesandatwholesalerates.AcorporationdeemednottobecarryingonatradeorbusinessinthisStateundersection235-6shallneverthelessbedeemedtobeawholesalerandshallbesubjecttothetaximposedbythischapter.[L1935,c141,ptof§1;RL1945,§5446;RL1955,§117-5;amL1957,c34,§11(a);amL1959,c257,§§1,2;amL1963,c70,§2;amimpL1965,c155,§2;amL1966,c28,§2;amL1967,c155,§1;HRS§237-4;amL1970,c180,§9;amL1971,c204,§2;amL1979,c105,§22;amL1982,c189,§1andc253,§2;amL1984,c73,§2;amL1990,c286,§2;amL1991,c286,§2;amL1992,c106,§5;gench1992;amL1999,c71,§4andc173,§1;amL2000,c198,§1andc271,§1;amL2001,c164,§2;amL2008,c16,§5andc89,§1;amL2015,c22,§2]
Cross Reference
TaxInformationReleaseNo.26-70,“ApplicationoftheGeneralExciseTaxtoCommercialJobPrinters” OBSOLETETax Information Release No. 39-72, “Application of the General Excise Tax on Sales to Persons Engaged in theAutomobile Painting
anOut-of-StateSeller,IncludingDropShipments”TaxInformationReleaseNo.96-4,“TheGeneralExciseTaxRatesLeviedonSalesofPesticidestoPestControlOperators”TaxInformationReleaseNo.98-2,“ApplicationoftheGeneralExciseandUseTaxestoCertainLeasingTransactions”TaxInformationReleaseNo.98-8,“ApplicationofAct247,SessionLawsofHawaii1998(Act247),Relating to theGeneralExciseTax
“Federalcost-pluscontractor”meansacontractorhavingacontractwiththeUnitedStatesoraninstrumentalitythereof, excluding national banks, where, by the terms of the contract, the United States or such instrumentality,excludingnationalbanks,agreestoreimbursethecontractorforthecostofmaterial,plant,orequipmentusedintheperformanceofthecontractandfortaxeswhichthecontractormayberequiredtopaywithrespecttosuchmaterial,plant,orequipment,whetherthecontractor’sprofitiscomputedintheformofafixedfeeoronapercentagebasis;andalsomeansasubcontractorundersuchacontract,whoalsooperatesonacost-plusbasis.[L1935,c141,ptof§1;amL1941,c265,§1(b);amL1943,c81,§1(a);RL1945,§5448;RL1955,§117-7;amL1965,c201,§36;HRS§237-6;amL1971,c4,§1andc204,§3;amL1984,c60,§1;amL2000,c198,§2]
§237-7 “Service business or calling”, defined. “Servicebusinessorcalling”includesallactivitiesengagedinforotherpersonsforaconsiderationwhichinvolvetherenderingofaservice,includingprofessionalandtransportationservices,asdistinguished from thesaleof tangiblepropertyor theproductionandsaleof tangibleproperty.“Servicebusinessorcalling”doesnotincludetheservicesrenderedbyanemployeetotheemployee’semployer.[L1935,c141,ptof§1;RL1945,§5449;amL1951,c165,§1;RL1955,§117-8;HRS§237-7;amL1983,c206,§3;amimpL1984,c90,§1;gench1985;amL1999,c71,§5;amLSp20013d,c9,§2]
§237-8 Administration and enforcement by department. The administration of this chapter is vested inandshallbeexercisedbythedepartmentoftaxation,whichshallprescribeformsandreasonablerulesofprocedureinconformitywiththischapterforthemakingofreturnsandfortheascertainment,assessment,andcollectionofthetaxesimposedhereunder.Suchformsandrules,whenprescribedbythedepartmentandprintedandpublishedinthemannerprovidedbylawshallhavetheforceandeffectoflaw.TheenforcementofthischapterinanyofthecourtsoftheStateisundertheexclusivejurisdictionofthedepartment,whichshallrequiretheassistanceoftheattorneygeneraloftheState,therespectivecountyattorneysandtheprosecutingattorneyofthecountieswheresuitisbrought;buttheseattorneysshallreceivenofeesorcompensationforservicesrenderedinenforcingthischapterinadditiontotherespectivesalariespaidbylawtothem.
§237-8.6 County surcharge on state tax; administration. [Section repealed December 31, 2030. L Sp 2017, c 1, §6.] (a)Thecounty surchargeon state tax,upon the adoptionof countyordinances and in accordancewith therequirementsofsection46-16.8,shallbelevied,assessed,andcollectedasprovidedinthissectiononallgrossproceedsandgrossincometaxableunderthischapter.Nocountyshallsetthesurchargeonstatetaxatarategreaterthanone-halfpercentofallgrossproceedsandgrossincometaxableunderthischapter.Allprovisionsofthischaptershallapplytothecountysurchargeonstatetax.Withrespecttothesurcharge,thedirectoroftaxationshallhavealltherightsandpowersprovidedunderthischapter.Inaddition,thedirectoroftaxationshallhavetheexclusiverightsandpowertodeterminethecountyorcountiesinwhichapersonisengagedinbusinessand,inthecaseofapersonengagedinbusinessinmorethanonecounty,thedirectorshalldetermine,throughapportionmentorothermeans,thatportionofthesurchargeonstatetaxattributabletobusinessconductedineachcounty.
(e) The director of taxation shall revise the general excise tax forms to provide for the clear and separatedesignationoftheimpositionandpaymentofthecountysurchargeonstatetax.
(b) Licensesandapplicationsthereforshallbeinsuchformasthedepartmentshallprescribe,exceptthatwherethelicenseeisengagedintwoormoreformsofbusinessofdifferentclassification,thelicenseshallsostateonitsface.Thelicenseprovidedforbythissectionshallbeeffectiveuntilcanceledinwriting.AnyapplicationforthereissuanceofapreviouslycanceledlicenseidentificationnumberafterDecember31,1989,shallberegardedasanewlicenseapplicationandsubject to thepaymentof theone-timelicensefeeof$20.Thedirectormayrevokeorcancelanylicenseissuedunderthischapterforcauseasprovidedbyrulesadoptedpursuanttochapter91.
(c) Anypersonwhoreceivesgross incomeorgrossproceedsofsalesorvalueofproductsfromengaginginbusinessintheStateandwhofailstoobtainalicenseorreceivesgrossincomeorgrossproceedsofsalesorvalueofproducts fromengaging inbusiness in theStatewithouta licenserequiredunder thissectionmaybefinednotmorethan$500;providedthatacash-basedbusinessmaybefinednotlessthan$500andnotmorethan$2,000,asdeterminedbythedirectororthedirector’sdesignee.Thepenaltyunderthissubsectionshallbeinadditiontoanyotherpenaltyprovidedunderlawandmaybewaivedorcanceleduponashowingofgoodcause.
(1) NotifyallofitsdirectsellersmakingsalesintheStatethatithasbeendesignatedtocollect,report,andpayover the tax imposedby thischapterandchapter238on theirbehalfon thebusinessactivityconductedthroughthemarketingarrangement;
(2) If required by the director as a condition of obtaining the license, furnishwith the annual return, a list(includingidentificationnumbers)ofalldirectsellersforthetaxableyearwhohavebeenprovided(bythetaxcollectionagent) information returns requiredunder section6041Aof the InternalRevenueCodeof1986,asamended,andanyotherinformationthatisrelevanttoensureproperpaymentoftaxesdueunderthissection;and
§237-9.3 General excise tax benefits; denial of tax benefits for failure to properly claim. (a)Notwithstandinganyotherlawtothecontrary,apersonshallnotbeentitledtoanygeneralexcisetaxbenefitunderthischapterunlessthepersonclaimingthegeneralexcisetaxbenefit:
[§237-9.5] No separate licensing, filing, or liability for certain revocable trusts. Inthecaseofanytrustthat,forstateandfederalincometaxreportingpurposes:
[§237-10.5] Reporting requirement for contractors on federal construction projects. All personswho do notpossessavalidlicenseunderthischapteratthetimeofthecontractawardandwhocontractwiththefederalgovernmentforanyconstructionprojectlocatedintheStateshallreporttothedepartment,onformsprescribedbythedepartment,itsestimatedgrossreceiptsoranyotherinformationrequestedbythedepartmentontheprescribedform,fromtheconstructionprojectwithinthirtydaysofthecontractbeingawarded.Failuretoreportasprovidedinthissectionshallresultinapenaltyof$1,000permonth,orfractionthereof,foreachmonththatafailuretoreportexists;providedthatthemaximumpenaltyallowedunderthissectionintheaggregateshallnotbemorethan$6,000.[L2009,c134,§3;amL2013,c58,§1]
§237-12 Tax cumulative; extent of license. (a)Thetaximposedbythischaptershallbeinadditiontothelicensefeeimposedundersection237-9andallothertaxesleviedbylawasaconditionprecedenttoengaginginanybusiness,trade,orcalling.Apersonexercisingaprivilege taxableunder thischapter, subject to thepaymentof the license feeimposedundersection237-9,whichisaconditionprecedenttoexercisingtheprivilegetaxed,mayexercisetheprivilegeupontheconditionthatthepersonshallpaythetaxaccruingunderthischapter.
§237-13 Imposition of tax. ThereisherebyleviedandshallbeassessedandcollectedannuallyprivilegetaxesagainstpersonsonaccountoftheirbusinessandotheractivitiesintheStatemeasuredbytheapplicationofratesagainstvaluesofproducts,grossproceedsofsales,orgrossincome,whicheverisspecified,asfollows:
(ii)Iftheproductshavenotbeensoldatthetimeoftheirentryintointerstateorforeigncommerce,and incasesgovernedbyclause (i) inwhich theproductsaresoldundercircumstancessuchthat thegrossproceedsof sale arenot indicativeof the truevalueof theproducts, thevalue
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of theproductsconstitutingthebasisforassessmentshallcorrespondasnearlyaspossible tothe gross proceeds of sales for delivery outside theState, adjusted as provided in clause (i),orifsufficientdataarenotavailable,salesintheState,ofsimilarproductsoflikequalityandcharacterandinsimilarquantities,madebythetaxpayer(unlessnotindicativeofthetruevalue)orbyothers.SalesoutsidetheState,adjustedasprovidedinclause(i),maybeconsideredwhenthey constitute the best available data.Thedepartment shall prescribe uniformand equitablerulesforascertainingthevalues;
whatsoever (not including, however, bonds or other evidence of indebtedness, or stocks), there islikewiseherebylevied,andshallbeassessedandcollected,ataxequivalenttofourpercentofthegrossproceedsofsalesofthebusiness;providedthat,inthecaseofawholesaler,thetaxshallbeequaltoone-halfofonepercentofthegrossproceedsofsalesofthebusiness;andprovidedfurtherthatinsofarasthesaleoftangiblepersonalpropertyisawholesalesaleundersection237-4(a)(8)(B),thetaxshallbeone-halfofonepercentofthegrossproceeds.UponeverypersonengagingorcontinuingwithinthisStateinthebusinessofaproducer,thetaxshallbeequaltoone-halfofonepercentofthegrossproceedsofsalesofthebusiness,orthevalueoftheproducts,forsale,ifsoldfordeliveryoutsidetheStateorshippedortransportedoutoftheState,andthevalueoftheproductsshallbedeterminedinthesamemannerasthevalueofmanufacturedproductscoveredinthecasesunderparagraph(1)(C).
(ii)The absenceof a certificate in itself shall give rise to thepresumption that the sale is not atwholesaleunlessthesalesofthebusinessareexclusivelyatwholesale.
(i)Anothertaxpayerwhoisacontractor,asdefinedinsection237-6; (ii)A specialty contractor, duly licensed by the department of commerce and consumer affairs
provided that any person claiming a deduction under this paragraph shall be required to show intheperson’sreturnthenameandgeneralexcisenumberofthepersonpayingthetaxontheamountdeductedbytheperson.
(D) Apersonwho,asabusinessorasapartofabusinessinwhichthepersonisengaged,erects,constructs,orimprovesanybuildingorstructure,ofanykindordescription,ormakes,constructs,orimprovesanyroad,street,sidewalk,sewer,orwatersystem,orotherimprovementsonlandheldbytheperson(whetherheldasaleasehold,feesimple,orotherwise),uponthesaleorotherdispositionofthelandorimprovements,eveniftheworkwasnotdonepursuanttoacontract,shallbeliabletothesametaxasifengagedinthebusinessofcontracting,unlessthepersonshowsthatatthetimethepersonwasengagedinmakingtheimprovementsthepersonintended,andfortheperiodofatleastoneyearaftercompletionofthebuilding,structure,orotherimprovements,thepersoncontinuedtointendtoholdandnotsellorotherwisedisposeofthelandorimprovements.Thetaxinrespectoftheimprovementsshallbemeasuredbytheamountoftheproceedsofthesaleorotherdispositionthatisattributabletotheerection,construction,orimprovementofsuchbuildingorstructure,orthemaking,constructing,or improving of the road, street, sidewalk, sewer, or water system, or other improvements. Themeasureoftaxinrespectoftheimprovementsshallnotexceedtheamountwhichwouldhavebeentaxablehadtheworkbeenperformedbyanother,subjectasinothercasestothedeductionsallowedbysubparagraph(B).Upontheelectionofthetaxpayer,thisparagraphmaybeappliednotwithstandingthattheimprovementswerenotmadebythetaxpayer,orwerenotmadeasabusinessorasapartofabusiness,orweremadewiththeintentionofholdingthesame.However,thisparagraphshallnotapplyinrespectofanyproceedsthatconstituteorareinthenatureofrent;allsuchgrossincomeshallbetaxableunderparagraph(9);providedthatinsofarasthebusinessofrentingorleasingrealpropertyunderaleaseistaxedundersection237-16.5,thetaxshallbeleviedbysection237-16.5.
(B) The departmentmay require that the person rendering an amusement atwholesale take from thelicensedselleracertificate,inaformprescribedbythedepartment,certifyingthatthesaleisasaleatwholesale;providedthat:
(i)Anylicensedsellerwhofurnishesacertificateshallbeobligatedtopaytothepersonrenderingthe amusement, upon demand, the amount of additional tax that is imposed upon the sellerwheneverthesaleisnotatwholesale;and
(ii)The absenceof a certificate in itself shall give rise to thepresumption that the sale is not atwholesale unless the person rendering the sale is exclusively rendering the amusement atwholesale.
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(5) Taxuponsalesrepresentatives,etc.Uponeverypersonclassifiedasarepresentativeorpurchasingagentunder section237-1, engagingor continuingwithin theState in thebusinessofperforming services foranother,otherthanasanemployee,thereislikewiseherebyleviedandshallbeassessedandcollectedataxequaltofourpercentofthecommissionsandothercompensationattributabletotheservicessorenderedbytheperson.
(ii)The absenceof a certificate in itself shall give rise to thepresumption that the sale is not atwholesaleunlessthepersonrenderingthesaleisexclusivelyrenderingservicesatwholesale.
(C) Where any person is engaged in the business of selling interstate or foreign common carriertelecommunicationserviceswithinandwithouttheState,otherthanasahomeserviceprovider,thetax shall be imposedon thatportionofgross income receivedbyaperson fromservicewhich isoriginatedorterminatedinthisStateandischargedtoatelephonenumber,customer,oraccountinthisStatenotwithstandinganyotherstatelaw(exceptfortheexemptionundersection237-23(a)(1))tothecontrary.If,undertheConstitutionandlawsoftheUnitedStates,theentiregrossincomeasdeterminedunder thisparagraphofabusinessselling interstateor foreigncommoncarrier telecommunicationservicescannotbeincludedinthemeasureofthetax,thegrossincomeshallbeapportionedasprovidedinsection237-21;providedthattheapportionmentfactorandformulashallbethesameforallpersonsprovidingthoseservicesintheState.
(D) Whereanypersonisengagedinthebusinessofahomeserviceprovider,thetaxshallbeimposedonthegrossincomereceivedorderivedfromprovidinginterstateorforeignmobiletelecommunicationsservicestoacustomerwithaplaceofprimaryuseinthisStatewhensuchservicesoriginateinonestateandterminateinanotherstate,territory,orforeigncountry;providedthatallchargesformobiletelecommunicationsserviceswhicharebilledbyorforthehomeserviceprovideraredeemedtobeprovidedbythehomeserviceprovideratthecustomer’splaceofprimaryuse,regardlessofwherethemobile telecommunicationsoriginate, terminate,orpass through;provided further that the incomefromchargesspecificallyderivedfrominterstateorforeignmobiletelecommunicationsservices,asdeterminedbybooksandrecordsthatarekeptintheregularcourseofbusinessbythehomeserviceproviderinaccordancewithsection239-24,shallbeapportionedunderanyapportionmentfactororformulaadoptedundersubparagraph(C).Grossincomeshallnotinclude:
(iii)Grossreceiptsfrommobiletelecommunicationsservicestaxedundersection237-13.8;and (iv)Gross receipts of a home service provider acting as a serving carrier providing mobile
(9) Taxonotherbusiness.UponeverypersonengagingorcontinuingwithintheStateinanybusiness,trade,activity, occupation, or calling not included in the preceding paragraphs or any other provisions of thischapter,thereislikewiseherebyleviedandshallbeassessedandcollected,ataxequaltofourpercentofthegross incomethereof.Inaddition, therateprescribedbythisparagraphshallapplytoabusiness taxableunderoneormoreoftheprecedingparagraphsorotherprovisionsofthischapter,astoanygrossincomethereofnottaxedthereunderasgrossincomeorgrossproceedsofsalesorbytaxinganequivalentvalueofproducts,unlessspecificallyexempted.[L1935,c141,§2I;amL1939,c252,§§1,2;amL1943,c81,ptof§1;RL1945,§5455;amL1945,c100,§3andc253,§2;amL1947,c111,§9andc113,§7;amL1953,c183,§3;RL1955,§117-14;amL1957,c34,§§5,11(d)to(g);amLSp1957,c1,§3(e)to(s);amLSp19592d,c1,§16;amL1960,c4,§§2,3,4andc24,§1;amL1962,c27,§1;amL1965,c155,§14(a)to(h);amL1966,c28,§3;HRS§237-13;amL1969,c137,§1;amL1970,c180,§10;amL1971,c204,§§5,6;amL1977,c160,§1;amL1978,c144,§2;amL1982,c204,§8;amL1986,c324,§1;amL1991,c21,§1;amL1992,c106,§6;amL1993,c188,§1;amL1994,c141,§1;amL1997,c353,§3;amL1998,c169,§§1,3;amL1999,c71,§6andc173,§2;amL2000,c198,§3;amL2002,c209,§3;amL2003,c135,§3andc212,§3;amL2008,c16,§6;amL2014,c42,§2;amL2015,c22,§3]
TaxInformationReleaseNo.26-70,“ApplicationoftheGeneralExciseTaxtoCommercialJobPrinters” OBSOLETETaxInformationReleaseNo.42-74,“ApplicationoftheGeneralExciseTaxtoInterestIncome”Tax Information ReleaseNo. 47-75, “Guidelines for Establishing Status of Individual Insurance Solicitors as Employees or Independent
Professionsdefined.34H.245.Taxonpersonssellingtopostexchangesandship’sstoresallowed.Notunconstitutional.37H.314,aff’d174F.2d21.Radiostations.40H.121,aff’d216F.2d700.Applicability of tax on selling to sales bymanufacturer. 41H. 615. Abusiness printing andpublishing a daily newspaper, etc. is not a
taxableatrateof4%. 79H.503,904P.2d517.FederalAviationAct preempts theState’s ability to assess general excise taxes on revenues derived from the sale of “air transportation”;
§237-13.5 Assessment on generated electricity. Anyotherprovisionofthelawtothecontrarynotwithstanding,thelevyandassessmentofthegeneralexcisetaxonthegrossproceedsfromthesaleofelectricpowertoapublicutilitycompanyforresaletothepublic,shallbemadeonlyasataxonthebusinessofaproducer,attherateassessedproducers,undersection237-13(2)(A).[L1980,c78,§2;amL1981,c103,§1;amL1985,c211,§1]
[§237-13.8] Sales of telecommunications services through prepaid telephone calling service. (a)Forthepurposesofthissection,“prepaidtelephonecallingservice”meanstherighttoexclusivelypurchasetelecommunicationservices,paidforinadvance,thatenablestheoriginationofcallsusinganaccessnumberorauthorizationcode,whethermanuallyorelectronicallydialed.
(b) If thesaleorrechargeofaprepaid telephonecallingservicedoesnot takeplaceat thevendor’splaceofbusiness,itshallbeconclusivelydeterminedtotakeplaceatthecustomer’sshippingaddress;orifthereisnoitemshipped,thenitshallbethecustomer’sbillingaddress.
GENERAL EXCISE TAX LAW §237-16
CHAPTER237,Page19(UnofficialCompilation)
(c) When a person licensed under this chapter sells prepaid telephone calling services to a licensed retailmerchant, jobber,orother licensedseller forpurposesof resale, thepersonshallbe taxedasawholesaler sellingtangiblepersonalproperty.Allothersalesofprepaidtelephonecallingservicesshallbetaxedasretailsalesoftangiblepersonalproperty.
§237-14 Segregation of gross income, etc., on records and in returns. Theimpositionoftaxesandtheapplicationoftaxratesdonotdependuponthebusinessinwhichthetaxpayerisprimarilyengaged.Onebusinessmaybesubjecttotwoormoretaxrates.Ifabusinessiswithinthepurviewoftwoormoreoftheparagraphsofsection237-13orotherprovisionsofthischapterallofthemapply,eachprovisionbeingapplicabletotheappropriateitemofgrossincome,grossproceedsofsales,orvalueofproducts.However,anypersonengagingorcontinuinginabusinesshavinggrossincome,grossproceedsofsales,andvalueofproducts,oranyoftheseasthecasemaybe,taxableatdifferentrates,shallbesubjecttotaxationupontheaggregateamountofthegrossincome,grossproceedsofsales,andvalueofproductsofthebusinessatthehighestrateapplicabletoanypartoftheaggregate,unlessthepersonshallsegregatethepartstaxableatdifferentratesupontheperson’srecordsandintheperson’sreturns,andshallsustaintheburdenofprovingthatthesegregationwascorrectlymade.[L1957,c34,§11(h);Supp,§117-14.1;HRS§237-14;amimpL1984,c90,§1;gench1985]
§237-14.5 Segregation of gross income, etc., on records and in returns of telecommunications businesses. (a)Notwithstanding section 237-14, any person engaged in the business of selling interstate or foreign common carriertelecommunicationsservicestaxableundersection237-13(6)(C),oranypublicutilitydefinedinsection269-1havinggrossincomefromtheconveyanceortransmissionoftelephoneortelegraphmessages,orfromthefurnishingoffacilitiesforthetransmissionofintelligencebyelectricity,mayreasonablysegregateintheperson’sreturns,basedonitsbooksandrecordsthatarekeptinthenormalcourseofbusiness:
§237-16.5 Tax on written real property leases; deduction allowed. [Section effective until December 31, 2018. For section effective January 1, 2019, see below.](a)Thissectionrelatestotheleasingofrealpropertybyalessortoalessee.Thereisherebylevied,andshallbeassessedandcollectedannually,aprivilegetaxagainstpersonsengagingorcontinuingwithintheStateinthebusinessofleasingrealpropertytoanother,equaltofourpercentofthegrossproceedsorgrossincomereceivedorderivedfromtheleasing;providedthatwhererealpropertyissubleasedbyalesseetoasublessee,thelessee,asprovidedinthissection,shallbeallowedadeductionfromtheamountofgrossproceedsorgrossincomereceivedfromitssubleaseoftherealproperty.Thedeductionshallbeintheamountallowedunderthissection.
shallnotbechangedduringthetermofthesublease.Thereshallbeareasonablebasisfortheallocations,takingintoconsiderationthesize,quality,andlocationoftherealpropertyorspacesubleased.Innoeventshallthetotalamountallocatedtoallsubleasesexceedthetotalmonetarygrossproceedspaidbythelesseetoitslessor.Thedirectormayredetermine theamountof thedeductionunder thissection if thedirectorfinds that thebasis forallocation isnotreasonableorthatredeterminationisnecessarytopreventtheavoidanceoftaxes.
Theamount calculated shallbedeductedby the lessee from the lessee’s total reportedgrossproceedsorgrossincome.Thedeductionallowedbythissubsectionmaybetakenbythefiscalandcalendaryearlessees.[L1997,c353,§2;amL2008,c28,§4,amL2015,c22,§4]
§237-16.5 Tax on written real property leases; deduction allowed. [Section effective January 1, 2019. For section effective until December 31, 2018, see above.](a)Thissectionrelatestotheleasingofrealpropertybyalessortoalessee.Thereisherebylevied,andshallbeassessedandcollectedannually,aprivilegetaxagainstpersonsengagingorcontinuingwithintheStateinthebusinessofleasingrealpropertytoanother,equaltofourpercentofthegrossproceedsorgross
shallnotbechangedduringthetermofthesublease.Thereshallbeareasonablebasisfortheallocations,takingintoconsiderationthesize,quality,andlocationoftherealpropertyorspacesubleased.Innoeventshallthetotalamountallocatedtoallsubleasesexceedthetotalmonetarygrossproceedspaidbythelesseetoitslessor.Thedirectormayredetermine theamountof thedeductionunder thissection if thedirectorfinds that thebasis forallocation isnotreasonableorthatredeterminationisnecessarytopreventtheavoidanceoftaxes.
Theamount calculated shallbedeductedby the lessee from the lessee’s total reportedgrossproceedsorgrossincome.Thedeductionallowedbythissubsectionmaybetakenbythefiscalandcalendaryearlessees.[L1997,c353,§2;amL2008,c28,§4,amL2015,c22,§4;amL2017,c181,§9]
[§237-16.8] Exemption of certain convention, conference, and trade show fees. Inadditiontoanyotherapplicableexemptionprovidedunderthischapter,thereshallbeexemptedfromthemeasureoftaxesimposedbythischapterallofthevalueorgrossincomederivedbyafraternalbenefit,religious,charitable,scientific,educational,orothernonprofitorganizationundersection501(c)oftheInternalRevenueCodeof1986,asamended,fromfeesforconvention,conference,ortradeshowexhibitordisplayspaces;providedthatthegrossproceedsofsalesbyavendorthroughtheuseofexhibitordisplayspaceataconference,convention,ortradeshowshallbesubjecttotheimpositionofthegeneralexcisetaxundersection237-13.[L2004,c214,§1]
§237-17 Persons with impaired sight, hearing, or who are totally disabled. Anythinginsection237-13tothecontrarynotwithstanding,theprivilegetaxlevied,assessed,andcollectedonaccountofthebusinessorotheractivitiesofindividualswhoareblind,deaf,ortotallydisabled,corporationsallofwhoseoutstandingsharesareownedbyindividualswhoareblind,deaf,ortotallydisabled,general,limited,orlimitedliabilitypartnerships,allofwhosepartnersareblind,deaf,ortotallydisabled,orlimitedliabilitycompanies,allofwhosemembersareblind,deaf,ortotallydisabled,shallnotexceedone-halfofonepercentoftheproceeds,sales,income,orotherreceiptssubjecttotax.Forthepurposeofthischapter“blind”,“deaf”,or“totallydisabled”isdefinedasinsection235-1.Theimpairmentofsightorhearing,orthedisability,shallbecertifiedtoasprovidedinsection235-1.[L1947,c213,§8;amL1953,c139,§4;RL1955,§117-15;amL1959,c246,§12;amLSp19592d,c1,§19;amL1960,c4,§5;amL1961,c177,§2;amL1966,c28,§7;HRS§237-17;amL1973,c91,§2;amL1988,c81,§2;amL2002,c110,§2]
§237-18 Further provisions as to application of tax. (a)Whereacoinoperateddeviceproducesgrossincomewhichisdividedbetweentheowneroroperatorofthedevice,ontheonehand,andtheowneroroperatorofthepremiseswherethedeviceislocated,ontheotherhand,thetaximposedbythischaptershallapplytoeachsuchpersonwithrespecttotheperson’sportionoftheproceeds,andnomore.
(b) Wheregate receipts or other admissions are dividedbetween the person furnishingor producing a play,concert,lecture,athleticevent,orsimilarspectacle(includinganymotionpictureshowing)ontheonehand,andapromoter(includinganyproprietororotheroperatorofamotionpicturehouse)offeringthespectacletothepublic,ontheotherhand,thetaximposedbythischapter,ifthepromoterissubjecttothetaximposedbythischapter,shallapplyonlytothepromotermeasuredbythewholeoftheproceeds,andthepromotershallbeauthorizedtodeductandwithholdfromtheportionoftheproceedspayabletothepersonfurnishingorproducingthespectacletheamountofthetaxpayablebythepersonuponsuchportion.Notaxshallapplytoapromoterwithrespecttosuchportionoftheproceedsasispayabletoapersonfurnishingorproducingthespectacle,whoisexemptedbysection237-23fromtaxationuponsuchactivity.
(e) Whereinsuranceagents,includinggeneralagents,subagents,orsolicitors,whoarenotemployeesandarelicensed pursuant to chapter 431, or real estate brokers or salespersons,who are not employees and are licensedpursuanttochapter467,producecommissionswhicharedividedbetweensuchgeneralagents,subagents,orsolicitors,orbetweensuchrealestatebrokersorsalespersons,asthecasemaybe,thetaxleviedundersection237-13(6)astorealestatebrokersorsalespersons,orundersection237-13(7)astoinsurancegeneralagents,subagents,orsolicitorsshallapplytoeachsuchpersonwithrespecttotheperson’sportionofthecommissions,andnomore.
(f) Wheretourismrelatedservicesarefurnishedthrougharrangementsmadebyatravelagencyortourpackagerand thegross income isdividedbetween theproviderof the servicesand the travel agencyor tourpackager, thetaximposedbythischaptershallapplytoeachsuchpersonwithrespecttosuchperson’srespectiveportionoftheproceeds,andnomore.
As used in this subsection “tourism related services”means catamaran cruises, canoe rides, dinner cruises, leigreetings,transportationincludedinatourpackage,sightseeingtoursnotsubjecttochapter239,admissionstoluaus,dinnershows,extravaganzas,culturalandeducationalfacilities,andotherservicesrendereddirectlytothecustomerortourist,butonlyiftheprovidersoftheservicesotherthanairtransportationaresubjecttoafourpercenttaxunderthischapterorchapter239.
GENERAL EXCISE TAX LAW §237-20
CHAPTER237,Page23(UnofficialCompilation)
(g) Where transient accommodations are furnished through arrangements made by a travel agency or tourpackager at noncommissioned negotiated contract rates and the gross income is divided between the operator oftransientaccommodationsontheonehandandthetravelagencyortourpackagerontheotherhand,thetaximposedbythischaptershallapplytoeachsuchpersonwithrespecttosuchperson’srespectiveportionoftheproceeds,andnomore.
Asused in this subsection, thewords “transient accommodations”and“operator” shall bedefined in the samemannerastheyaredefinedinsection237D-1.
(h) Where the transportation of passengers or property is furnished through arrangements between motorcarriers,andthegrossincomeisdividedbetweenthemotorcarriers,anytaximposedbythischaptershallapplytoeachmotorcarrierwithrespecttoeachmotorcarriers’respectiveportionoftheproceeds.
§237-20 Principles applicable in certain situations. Apersonorcompanyhavingshareholdersormembers(acorporation,association,group,trust,partnership,jointadventure,orotherperson)istaxableuponitsbusinesswiththem,andtheyaretaxableupontheirbusinesswithit.Apersonorcompany,whetherornotcalledacooperative,throughwhichshareholdersormembersarepursuingacommonobjective(forexample,theobtainingofpropertyorservicesfortheirindividualbusinessesoruse,orthemarketingoftheirindividualproducts)isataxableperson,andsuchfactsdonotgiverisetoanytaxexemptionortaxbenefitexceptasspecificallyprovided.Eventhoughabusinesshassomeoftheaspectsofagencyitshallnotbesoregardedunlessitisatrueagency.Thereimbursementofcostsoradvancesmadefororonbehalfofonepersonbyanothershallnotconstitutegrossincomeofthelatter,unlessthepersonreceivingsuchreimbursementalsoreceivesadditionalmonetaryconsiderationformakingsuchcostsoradvances.[L1957,c34,§11(i);amL1965,c201,§24;Supp,§117-17.1;amL1967,c297,§2;HRS§237-20;amL1985,c303,§1;amL1986,c340,§8]
thusmadesubjecttothegeneralexcisetaxbythissection.93H.267(App.),999P.2d865.Thereimbursementprovisionof thissectiondidnotapply to taxpayerwhere taxpayerdidnotpayanycostsormadeanyadvances to the
§237-21 Apportionment. If anyperson, other thanpersons liable to the tax onmanufacturers as providedbysection237-13(1),isengagedinbusinessbothwithinandwithouttheStateorinsellinggoodsfordeliveryoutsidetheState,andifundertheConstitutionorlawsoftheUnitedStatesorsection237-29.5theentiregrossincomeofsuchpersoncannotbeincludedinthemeasureofthistax,thereshallbeapportionedtotheStateandincludedinthemeasureofthetaxthatportionofthegrossincomewhichisderivedfromactivitieswithintheState,totheextentthattheapportionmentisrequiredbytheConstitutionorlawsoftheUnitedStatesorsection237-29.5.InthecaseofataxupontheproductionofpropertyintheStatetheapportionmentshallbedeterminedasinthecaseofthetaxonmanufacturers.Inothercases,ifandtotheextentthattheapportionmentcannotbeaccuratelymadebyseparateaccountingmethods,thereshallbeapportionedtotheStateandincludedinthemeasureofthistaxthatproportionofthetotalgrossincome,sorequiringapportionment,whichthecostofdoingbusinesswithintheState,applicabletothegrossincome,bearstothecostofdoingbusinessbothwithinandwithouttheState,applicabletothegrossincome.[L1941,c115,§1;RL1945,§5457;RL1955,§117-18;amL1959,c277,§2;HRS§237-21;amL1987,c239,§5;amL1999,c70,§3]
§237-22 Conformity to Constitution, etc. (a)Incomputingtheamountsofanytaximposedunderthischapter,thereshallbeexceptedordeductedfromthevalues,grossproceedsofsales,orgrossincomesomuchthereofas,undertheConstitutionandlawsoftheUnitedStates,theStateisprohibitedfromtaxing,butonlysolongasandonlytotheextentthattheStateissoprohibited.
(b) To the extent that any deduction, allocation, or other method to determine tax liability is necessary tocomplywithsubsection(a),eachtaxpayerliableforthetaximposedbythischaptershallbeentitledtofulloffsetfortheamountoflegallyimposedsales,grossreceipts,orusetaxespaidbythetaxpayerwithrespecttotheimportedproperty,service,orcontractingtoanotherstateandanysubdivisionthereof;providedthatsuchoffsetshallnotexceedtheamountofgeneralexcisetaximposedunderthischapteruponthegrossproceedsofsalesorgrossincomefromthesaleandsubsequentsaleoftheimportedproperty,service,orcontracting.Theamountoflegallyimposedsales,grossreceipts,orusetaxespaidbythetaxpayerwithrespecttotheimportshallbefirstappliedagainstanyusetax,aspermittedundersection238-3(i),andanyremainingamountmaybeappliedunderthissectionforthesameimportedproperty,service,orcontracting.
Thedirector of taxationmay require the taxpayer to produce the necessary receipts or vouchers indicating thepaymentofthesales,grossreceipts,orusetaxestoanotherstateorsubdivisionasaconditionfortheallowanceofthisoffset.[L1935,c141,§3;RL1945,§5458;RL1955,§117-19;amL1957,c34,§11(j);HRS§237-22;amL2002,c98,§2]
§237-23 Exemptions, persons exempt, applications for exemption. (a) This chapter shall not apply to thefollowingpersons:
(1) Publicservicecompaniesasthattermisdefinedinsection239-2,withrespecttothegrossincome,eitheractual gross incomeor gross income estimated and adjusted, that is included in themeasure of the taximposedbychapter239;
benefit of themembers of the fraternity itself, operating under the lodge system, and providing for thepaymentofdeath,sick,accident,alegalserviceplan,orotherbenefitstothemembersofthesocieties,orders,orassociations,andtotheirdependents;
(4) Corporations,associations,trusts,orsocietiesorganizedandoperatedexclusivelyforreligious,charitable,scientific,oreducationalpurposes,aswellasthatofoperatingseniorcitizenshousingfacilitiesqualifyingfora loanunder the lawsof theUnitedStatesasauthorizedbysection202of theHousingActof1959,asamended,aswellasthatofoperatingalegalserviceplan,aswellasthatofoperatingormanagingahomelessfacility,oranyotherprogramforthehomelessauthorizedunderpartXVIIofchapter346;
(5) Business leagues, chambers of commerce, boards of trade, civic leagues, agricultural and horticulturalorganizations,andorganizationsoperatedexclusivelyforthebenefitofthecommunityandforthepromotionofsocialwelfarethatshallincludetheoperationofalegalserviceplan,andfromwhichnoprofitinurestothebenefitofanyprivatestockholderorindividual;
therequirementsofsection421-23,exceptCodesection521cooperativesneednotbeorganizedinHawaii;providedthat:(A) The exemption shall apply only to the gross income derived from activities that are pursuant to
(C) As used in this paragraph, “Code section 521 cooperatives” mean associations that qualify as acooperativeundersection521(withrespecttoexemptionoffarmers’cooperativesfromtax)oftheInternalRevenueCodeof1986,asamended;
§237-23.5 Related entities; common paymaster; certain exempt transactions. (a)Thischaptershallnotapplytoamountsreceived,charged,orattributabletoservicesfurnishedbyonerelatedentitytoanotherrelatedentityortoimputedorstatedinterestattributabletoloans,advances,oruseofcapitalbetweenrelatedentities.
defined)ofthefederalInternalRevenueCodeof1986,asamended;(2) A controlled groupof corporationswithin themeaningof section 1563 (with respect to definitions and
per cent of the total voting power of each such entity (or combination thereof), including partnerships,associations,trusts,Scorporations,nonprofitcorporations,limitedliabilitypartnerships,orlimitedliabilitycompanies;and
(4) Anygroup or combination of the entities described in paragraph (3) constituting a unitary business forincometaxpurposes;
Totheextentnotcoveredbysubsection(a),theexemptionallowedbythissubsectionshallnotapplytothecostofservices,orreimbursementsofsuchcostbyonecorporationtoanothercorporation,ofanemployeedisbursingtheamountsexemptedunder this subsection.Each relatedcorporationusingacommonpaymasterormultiplecommonpaymastershallkeepseparatepayrollrecordsandotherdocumentationrequiredtoprovetheexistenceofconcurrentemployment.Suchrecordsanddocumentsshallbeavailableforinspectionbythedirectoroftaxationduringnormalbusinesshours.[L1988,c175,§1;amL1997,c178,§4;amL1999,c165,§1;amL2001,c221,§12]
§237-24 Amounts not taxable. Thischaptershallnotapplytothefollowingamounts:(1) Amountsreceivedunderlifeinsurancepoliciesandcontractspaidbyreasonofthedeathoftheinsured;(2) Amounts received (other than amounts paid by reason of death of the insured) under life insurance,
(14)[Repeal and reenactment on December 31, 2018. L 2013, c 164, §2.]Amountsreceivedbyaproducerofsugarcanefromthemanufacturertowhomtheproducersellsthesugarcane,where:(A) Theproducerisanindependentcanefarmer,soclassedbytheSecretaryofAgricultureundertheSugar
Actof1948(61Stat.922,Chapter519)astheActmaybeamendedorsupplemented;(B) The value or gross proceeds of the sale of the sugar, and other productsmanufactured from the
(15)[Repeal and reenactment on December 31, 2018. L 2013, c 164, §2.] MoneypaidbytheStateoreleemosynarychild-placingorganizationstofosterparentsfortheircareofchildreninfosterhomes;
(16)[Repeal and reenactment on December 31, 2018. L 2013, c 164, §2.] Amountsreceivedbyacooperativehousingcorporationfromitsshareholdersinreimbursementoffundspaidbythecorporationforleaserental,realpropertytaxes,andotherexpensesofoperatingandmaintainingthecooperativelandandimprovements;providedthatthecooperativecorporationisacorporation:(A) Havingoneandonlyoneclassofstockoutstanding;(B) Eachofthestockholdersofwhichisentitledsolelybyreasonofthestockholder’sownershipofstock
(17)[Repeal and reenactment on December 31, 2018. L 2013, c 164, §2.] AmountsreceivedbyamanagedcaresupportcontractoroftheTRICAREprogramthatisestablishedunderTitle10UnitedStatesCodeChapter55,asamended,fortheactualcostoradvancementtothirdpartyhealthcareproviderspursuanttoacontractwiththeUnitedStates;and
§237-24.3 Additional amounts not taxable. [Section effective until December 31, 2018. For section effective January 1, 2019, see below.]Inadditiontotheamountsnottaxableundersection237-24,thischaptershallnotapplyto:
(4) Amounts received by an employee benefit plan byway of contributions, dividends, interest, and otherincome;andamountsreceivedbyanonprofitorganizationoroffice,aspaymentsforcostsandexpensesincurredfortheadministrationofanemployeebenefitplan;providedthatthisexemptionshallnotapplytoanygrossrentalincomeorgrossrentalproceedsreceivedafterJune30,1994,asincomefrominvestmentsinrealpropertyinthisState;andprovidedfurtherthatgrossrentalincomeorgrossrentalproceedsfrom
“Prescription drugs” are those drugs defined under section 328-1 and dispensed byfilling or refilling awrittenororalprescriptionbyapractitionerlicensedunderlawtoadministerthedrugandsoldbyalicensedpharmacistundersection328-16orpractitionerslicensedtoadministerdrugs;providedthat“prescriptiondrugs”shallnotincludecannabisormanufacturedcannabisproductsauthorizedpursuanttochapters329and329D.
“Prostheticdevice”meansanyartificialdeviceorappliance,instrument,apparatus,orcontrivance,includingtheir components, parts, accessories, and replacements thereof, used to replace a missing or surgicallyremovedpartofthehumanbody,whichisprescribedbyalicensedpractitionerofmedicine,osteopathy,orpodiatryandthatissoldbythepractitionerorthatisdispensedandsoldbyadealerofprostheticdevices;provided that “prosthetic device” shall not mean any auditory, ophthalmic, dental, or ocular device orappliance,instrument,apparatus,orcontrivance;
(8) Amountsreceivedasduesbyanunincorporatedmerchantsassociationfromitsmembershipforadvertisingmedia,promotional,andadvertisingcostsforthepromotionoftheassociationforthebenefitofitsmembersas a whole and not for the benefit of an individualmember or group ofmembers less than the entiremembership;
Decisions under prior law.Optionsavailable todirectorof taxation to remedyconstitutionaldefect in§237-24(18)(C) (1992)andappellant’s entitlement to refund if
§237-24.3 Additional amounts not taxable. [Section effective January 1, 2019. For section effective until December 31, 2018, see above.]Inadditiontotheamountsnottaxableundersection237-24,thischaptershallnotapplyto:
(4) Amounts received by an employee benefit plan byway of contributions, dividends, interest, and otherincome;andamountsreceivedbyanonprofitorganizationoroffice,aspaymentsforcostsandexpensesincurredfortheadministrationofanemployeebenefitplan;providedthatthisexemptionshallnotapplytoanygrossrentalincomeorgrossrentalproceedsreceivedafterJune30,1994,asincomefrominvestmentsinrealpropertyinthisState;andprovidedfurtherthatgrossrentalincomeorgrossrentalproceedsfrominvestmentsinrealpropertyreceivedbyanemployeebenefitplanafterJune30,1994,underwrittencontractsexecutedpriortoJuly1,1994,shallnotbetaxeduntilthecontractsarerenegotiated,renewed,orextended,oruntilafterDecember31,1998,whicheverisearlier.Forthepurposesofthisparagraph,“employeebenefitplan”meansanyplanasdefinedintitle29UnitedStatesCodesection1002(3),asamended;
“Prescription drugs” are those drugs defined under section 328-1 and dispensed byfilling or refilling awrittenororalprescriptionbyapractitionerlicensedunderlawtoadministerthedrugandsoldbyalicensedpharmacistundersection328-16orpractitionerslicensedtoadministerdrugs;providedthat“prescriptiondrugs”shallnotincludecannabisormanufacturedcannabisproductsauthorizedpursuanttochapters329and329D.
“Prostheticdevice”meansanyartificialdeviceorappliance,instrument,apparatus,orcontrivance,includingtheir components, parts, accessories, and replacements thereof, used to replace a missing or surgicallyremovedpartofthehumanbody,whichisprescribedbyalicensedpractitionerofmedicine,osteopathy,orpodiatryandthatissoldbythepractitionerorthatisdispensedandsoldbyadealerofprostheticdevices;provided that “prosthetic device” shall not mean any auditory, ophthalmic, dental, or ocular device orappliance,instrument,apparatus,orcontrivance;
(8) Amountsreceivedasduesbyanunincorporatedmerchantsassociationfromitsmembershipforadvertisingmedia,promotional,andadvertisingcostsforthepromotionoftheassociationforthebenefitofitsmembersas a whole and not for the benefit of an individualmember or group ofmembers less than the entiremembership;
Decisions under prior law.Optionsavailable todirectorof taxation to remedyconstitutionaldefect in§237-24(18)(C) (1992)andappellant’s entitlement to refund if
(E) Participation in the communication network consortium operated collectively by United StatesexchangesorothermarketsrecognizedbytheSecuritiesandExchangeCommission,theCommoditiesFuturesTradingCommission,orsimilarregulatoryauthoritiesoutsidetheUnitedStatesthatprovideslastsaleandquotesecuritiesinformationtosubscribersorthatconnectssuchmarketsorexchangesforpurposesofdatatransmission;
§237-24.7 Additional amounts not taxable. [Repeal and reenactment on December 31, 2014. L 2010, c 91, §1.] In additiontotheamountsnottaxableundersection237-24,thischaptershallnotapplyto:
“Operator” means any person who, pursuant to a written contract with the owner of a hotel ortimeshareassociation,operatesormanagesthehotelfortheownerortimeshareassociation.
(4) Amountsreceivedbytheoperatoroforchardpropertiesfromtheowneroftheorchardpropertyinamountsequal toandwhicharedisbursedby theoperator foremployeewages, salaries,payroll taxes, insurancepremiums, and benefits, including retirement, vacation, sick pay, and health benefits. As used in thisparagraph:
“Employee” means an employee directly engaged in the day-to-day operations of the orchardpropertiesandemployedbytheoperator.
“Operator”means a producerwho, pursuant to awritten contractwith the owner of the orchardproperty,operatesormanages theorchardpropertyfor theownerwhere thepropertycontainsanareasufficienttomaketheundertakingeconomicallyfeasible.
“Employee” means employees directly engaged in the day-to-day operation of related entitiesengagedinthebusinessofsellinginterstateorforeigncommoncarriertelecommunicationsservicesandemployedbythemanagementcompany.
“Managementcompany”meansanypersonwho,pursuanttoawrittencontractwitharelatedentityengaged in the business of selling interstate or foreign common carrier telecommunications services,providesmanagerialoroperationalservicestothatentity.
eighty per cent of the total voting power of each such entity (or combination thereof), includingpartnerships,associations,trusts,Scorporations,nonprofitcorporations,limitedliabilitypartnerships,orlimitedliabilitycompanies;and
andindustrialrelationspursuanttochapter373L,fromaclientcompanyequaltoamountsthataredisbursedbytheprofessionalemployerorganizationforemployeewages,salaries,payrolltaxes,insurancepremiums,andbenefits,includingretirement,vacation,sickleave,healthbenefits,andsimilaremploymentbenefitswithrespecttocoveredemployeesataclientcompany;providedthatthisexemptionshallnotapplytoamountsreceivedbyaprofessionalemployerorganizationafter:(A) Notification from the department of labor and industrial relations that the professional employer
organizationhasnotfulfilledormaintainedtheregistrationrequirementsunderthischapter;or(B) A determination by the department that the professional employer organization has failed to pay
§237-24.8 Amounts not taxable for financial institutions. (a)Inadditiontotheamountsnottaxableundersection237-24,thischaptershallnotapplytoamountsreceivedby:
financialinstitutionfornotlessthanthelessor’sfullinvestmentinthepropertyplustheestimatedtotalcostoffinancingthepropertyoverthetermofthelease,from:(A) Rentals;(B) Estimated tax benefits (capital goods excise tax credit, net economic gain from tax deferral from
§237-24.9 Aircraft service and maintenance facility. (a)ThischaptershallnotapplytoamountsreceivedfromtheservicingandmaintenanceofaircraftorfromtheconstructionofanaircraftserviceandmaintenancefacilityintheState.
(b) Asusedinthissection:“Aircraft”means any craft or artificial contrivance ofwhatever description engaged in intrastate, interstate, or
§237-25 Exemptions of sales and gross proceeds of sales to federal government, and credit unions. (a)Anyprovisionoflawtothecontrarynotwithstanding,thereshallbeexemptedfrom,andexcludedfromthemeasuresof,thetaximposedbychapter237allsales,andthegrossproceedsofallsales,of:
(4) When the amount of property soldby a licensee turns upon the amount of theproperty sold through avendingmachineor similardevice to thecustomerusing thedevice, there shallnotbedeemed tohaveoccurredanysalecoveredbyanexemptionunderparagraph(1),(2),or(3).
(b) Nothinginthissectionshallbedeemedtoexemptanysalestoorbyafederalcost-pluscontractor,asdefinedinchapter237,orthegrossproceedsthereof;withrespecttoallsuchactivitiesandtransactions,taxesshallbelevied,returned,computed,andassessedthesameasifthissectionhadnotbeenenacted,andinthecaseofanelectionmadeunder sections237-13(2)(F) and237-13(3)(C)(ii), the tax shall be computed the sameasupona sale to the stategovernment.
§237-26 Exemption of certain scientific contracts with the United States. (a)Anyprovisionoflawtothecontrarynotwithstanding,thereshallbeexemptedfromthemeasureofthetaxesimposedbychapter237,allofthegrossproceedsderivedbyacontractororsubcontractorarisingfromtheperformanceofanyscientificworkasdefinedinsubsection(b),underacontractorsubcontractenteredintowiththeUnitedStates(includinganyagencyorinstrumentalitythereofbutnotincludingnationalbanks),andallofthegrossproceedsderivedfromthesaleoftangiblepersonalpropertybyasellerofsuchtangiblepersonalpropertytosuchcontractororsubcontractor;providedtheexemptionhereinshallapplyonlytosuchtangiblepersonalpropertywhichistobeaffixedto,ortobecomeaphysical,integralpartofthescientificfacility,orwhichistobeentirelyconsumedduringtheperformanceoftheservicerequiredbythecontractorsubcontract.
(b) Forpurposesof thissection,“scientificwork” iswork involvingprimarily theresearchanddevelopmentfor,or thedesign,manufacture, instrumentation, installation,maintenance,oroperationofaerospace,agricultural,astronomical,biomedical,electronic,geophysical,oceanographic,testrange,orotherscientificfacilities.Maintenanceor operation, for purposes of this section, shall include housekeeping functions in providing certain nonscientificlogisticandsupportservices.[L1965,c201,§27;Supp,§117-21.6;HRS§237-26;amL1970,c180,§13;amL1971,c4,§5;amL1988,c163,§1]
§237-27 Exemption of certain petroleum refiners. (a)Asuseinthissection:(1) “Petroleumproducts”meanspetroleum,anydistillate,fraction,orderivativeofpetroleum,naturalgasorits
fromthe refiner’sbusinessas is tobe further refinedbyanother refiner, to theextent that thepetroleumproductsresultantfromsuchfurtherrefiningwillbe(orbutforthissubsectionwouldbe)includedinthemeasureofthetaxonsuchotherrefiner,andwherepetroleumproductsaretobeusedpartlyforsuchrefiningandpartlyforotherpurposes,theproportionusedforeachpurposeshallbedetermineduponthebasisofweightorBTUcontent.[L1953,c274,§3;RL1955,§117-22;HRS§237-27;amimpL1984,c90,§1;gench1985]
§237-27.1 REPEALED. L2009,c11,§25
§237-27.5 Air pollution control facility. (a)Asusedinthissection,“airpollutioncontrolfacility”shallmeananewidentifiabletreatmentfacility,equipment,device,orthelike,whichisusedtoabateorcontrolatmosphericpollutionorcontaminationbyremoving,reducing,orrenderinglessnoxiousaircontaminantsemittedintotheatmospherefromapointimmediatelyprecedingthepointofsuchremoval,reduction,orrenderingtothepointofdischargeofair,meetingemissionstandardsasestablishedbythedepartmentofhealth,excludingairconditioner,fan,orothersimilarfacilityforthecomfortofpersonsataplaceofbusiness.
(b) Any provision of law to the contrary notwithstanding, and upon receipt of the certification required bysubsection(c),thereshallbeexemptedfrom,andexcludedfromthemeasureof,thetaxesimposedbythischapter,allofthegrossproceedsarisingfrom,andalloftheamountoftangiblepersonalpropertyfurnishedinconjunctionwith,theconstruction,reconstruction,erection,operation,use,ormaintenanceofanairpollutioncontrolfacility.
§237-27.6 Solid waste processing, disposal, and electric generating facility; certain amounts exempt. (a)Anyprovisionsofthelawtothecontrarynotwithstanding,thereshallbeexemptedfrom,andexcludedfromthemeasureof,thetaxesimposedbythischapteralloftheamountsenumeratedinsubsection(b)arisingfromatransactioninvolvingasaleandleasebackofasolidwasteprocessing,disposal,andelectricgeneratingfacilityenteredintobyapoliticalsubdivisionoftheStateundersection46-19.1wherethefacilityisownedorunderconstructionbythesubdivisionbeforeMay10,1988.
[§237-28.1] Exemption of certain shipbuilding and ship repair business. There shall be exempted from, andexcludedfromthemeasureof,thetaxesimposedbythischapterallofthegrossproceedsarisingfromshipbuildingandshiprepairsrenderedtosurfacevesselsfederallyownedorengagedininterstateorinternationaltrade.[L1971,c204,§1]
§237-28.2 REPEALED. L2003,c135,§12.
§237-29 Exemptions for certified or approved housing projects. (a)Allgrossincomereceivedbyanyqualifiedpersonorfirmfortheplanning,design,financing,construction,sale,orleaseintheStateofahousingprojectthathasbeencertifiedorapprovedundersection201H-36shallbeexemptfromgeneralexcisetaxes.
§237-29.5 Exemption for sales of tangible personal property shipped out of the State. (a)Thereshallbeexemptedfrom,andexcludedfromthemeasureof,thetaxesimposedbythischapterallofthevalueorgrossproceedsarisingfromthemanufacture,production,orsaleoftangiblepersonalproperty:
(2) Thesaleofwhichisexemptundersection237-24.3(2).(b) For the purposes of this section, the manufacturer, producer, or seller shall take from the purchaser, a
§237-29.53 Exemption for contracting or services exported out of State. (a)Thereshallbeexemptedfrom,andexcludedfromthemeasureof,taxesimposedbythischapter,allofthevalueorgrossincomederivedfromcontracting(asdefinedundersection237-6)orservicesperformedbyapersonengagedinaservicebusinessorcallingintheStateforuseoutsidetheStatewhere:
(b) There shall be exempted from, and excluded from themeasure of, taxes imposedby this chapter, all ofthevalueorgrossincomederivedfromcontracting(asdefinedinsection237-6)orservicesperformedbyapersonengagedinaservicebusinessorcallingintheStateforapurchaserwhoresellsallofthecontractingorservicesforresale,consumption,oruseoutsidetheStatepursuanttosubsection(a).Forthepurposesofthissubsection,theselleror person rendering the contractingor services for a purchaserwho resells the contractingor services for resale,consumption,oruseoutsidetheStateshalltakefromthepurchaser,acertificateoranequivalent,inaformthatthedepartmentprescribes,certifyingthatthecontractingorservicespurchasedistobeforresale,consumption,oruseoutsidetheStatepursuant tosubsection(a).Anypurchaserwhofurnishesthiscertificateoranequivalentshallbeobligatedtopaythesellerorpersonrenderingthecontractingorservices,upondemand,ifthecontractingorservicespurchasedisnotresoldinitsentiretytoacustomerofthepurchaserwhohascompliedwithsubsection(a),theamountoftheadditionaltaxwhichbyreasonthereofisimposeduponthesellerorthepersonrenderingthecontractingorservice.[L1999,c70,§1;amL2000,c198,§6]
[§237-29.55] Exemption for sale of tangible personal property for resale at wholesale. (a)Thereshallbeexemptedfrom,andexcludedfromthemeasureof,thetaxesimposedbythischapterallofthegrossproceedsorgrossincomearisingfromthesaleoftangiblepersonalpropertyimportedtoHawaiifromaforeignordomesticsourcetoalicensedtaxpayerforsubsequentresaleforthepurposeofwholesaleasdefinedundersection237-4.
GENERAL EXCISE TAX LAW [§237-29.8]
CHAPTER237,Page41(UnofficialCompilation)
(b) Thedepartment,byrule,mayprovidethatasellermaytakefromthepurchaserofimportedtangiblepersonalproperty, a certificate, in a form that thedepartment shallprescribe, certifying that thepurchaserof the importedtangiblepropertyshallreselltheimportedtangiblepersonalpropertyatwholesaleasdefinedundersection237-4.Anypurchaserwhofurnishesacertificateshallbeobligatedtopaytotheseller,upondemand,ifthesaleinfactisnotasaleforthepurposeofresaleatwholesale,theamountoftheadditionaltaxwhichbyreasonthereofisimposedupontheseller.Theabsenceofacertificate,unlessthesalesofthebusinessareexclusivelyasaleforthepurposeofresaleatwholesale,initself,shallgiverisetothepresumptionthatthesaleisnotasaleforthepurposeofresaleatwholesale.[L1998,c247,§1]
Cross Reference
TaxInformationReleaseNo.98-8,“ApplicationofAct247,SessionLawsofHawaii1998(Act247),Relating to theGeneralExciseTaxExemptionforTangiblePersonalPropertyImportedIntotheStateforResaleatWholesale”
§237-29.6 REPEALED effective January 1, 2000. L1999,c70,§9.Cross Reference
[§237-29.7] Exemption of insurance companies. Thischaptershallnotapplytothegrossincomeorgrossproceedsofinsurancecompaniesauthorizedtodobusinessunderchapter431;exceptthisexemptionshallnotapplytoanygrossincomeorgrossproceeds receivedafterDecember31,1991,as rents frominvestments in realproperty in thisState;providedthatgrossincomeorgrossproceedsfrominvestmentsinrealpropertyreceivedbyinsurancecompaniesafterDecember31,1991,underwrittencontractsenteredintobeforeJanuary1,1992,thatdonotprovideforthepassingonoftaxesortaxincreasesshallnotbetaxeduntilthecontractsarerenegotiated,renewed,orextended.[L1991,c286,§1]
(d) Asusedinthissection:“Call center”means a physical or electronicoperation that focuses onproviding customer service and support
for computer hardware and software companies, manufacturing companies, software service organizations, andtelecommunicationssupportservices,withinanorganizationinwhichamanagedgroupofindividualsspendmostoftheirtimeengaginginbusinessbytelephone,usuallyworkinginacomputer-automatedenvironment;providedthattheoperationshallnotincludetelemarketingorsales.
“Telecommunications service” or “telecommunications”means the offering of transmission between or amongpointsspecifiedbyauser,ofinformationoftheuser’schoosing,includingvoice,data,image,graphics,andvideowithoutchangeintheformorcontentoftheinformation,assentandreceived,bymeansofelectromagnetictransmission,orothersimilarlycapablemeansoftransmission,withorwithoutbenefitofanyclosedtransmissionmedium.
[§237- ] Temporary suspension of exemption of certain amounts; levy of tax. [Note: section is temporary and uncodified, shall take effect July 1, 2011 and shall be repealed on June 30, 2013. L 2011, c 105, §6] (a)Notwithstandinganyotherlawtothecontrary,theexemptionofthefollowingamountsfromtaxationunderthischaptershallbesuspendedfromJuly1,2011,throughJune30,2013:
showexhibits,ordisplayspacesasdescribedundersection237-16.8;(6) Amountsreceivedbysugarcaneproducersasdescribedundersection237-24(14);(7) Amounts received from the loading, transportation, and unloading of agricultural commodities shipped
interislandasdescribedundersection237-24.3(1);(8) Amounts received from the saleof intoxicating liquor, cigarettesand tobaccoproducts, andagricultural,
(C) “Other tangible personal property” to theUnited States (including any agency, instrumentality, orfederalcreditunionthereof,butnotincludingnationalbanks)andanystate-charteredcreditunionasdescribedundersection237-25(a)(3);
(19)Gross proceeds received from the construction, reconstruction, erection, operation, use,maintenance, orfurnishing of air pollution control facilities, as described under section 237-27.5, that do not have validcertificatesofexemptiononJuly1,2011;
[§237- ] Information reporting. [Note: section is temporary and uncodified, shall take effect July 1, 2011 and shall be repealed on June 30, 2013. L 2011, c 105, §6] BeginningJuly1,2011,thedirectoroftaxationshallrequireinformationreportingonallexclusionsorexemptionsofallamounts,persons,ortransactionsfromthischapter,exceptforthefollowing:
§237-30 Monthly, quarterly, or semiannual return, computation of tax, payment. (a) The taxes leviedhereundershallbepayableinmonthlyinstallmentsonorbeforethetwentiethdayofthecalendarmonthfollowingthemonthinwhichtheyaccrue.Thetaxpayer,onorbeforethetwentiethdayofthecalendarmonthfollowingthemonthinwhichthetaxesaccrue,shallmakeoutandsignareturnoftheinstallmentoftaxforwhichthetaxpayerisliableforthe
(2) Onasemiannualbasisduringthecalendarorfiscalyear,thereturnandpaymenttobemadeonorbeforethetwentieth day of the calendarmonth after the close of each six-month period, towit: for calendar yeartaxpayers,onJuly20andJanuary20or, forfiscalyear taxpayers,onorbefore the twentiethdayof theseventhmonthfollowingthebeginningofthefiscalyearandonorbeforethelastdayofthemonthfollowingthecloseofthefiscalyear;providedthatthedirectorissatisfiedthatthegrantofthepermitwillnotundulyjeopardizethecollectionofthetaxesduethereonandthetaxpayer’stotaltaxliabilityforthecalendarorfiscalyearunderthischapterwillnotexceed$2,000.
(c) If a taxpayerfiling the taxpayer’s returnon a quarterly or semiannual basis, as provided in this section,becomesdelinquentineitherthefilingofthetaxpayer’sreturnorthepaymentofthetaxesduethereon,oriftheliabilityofataxpayer,whopossessesapermittofilethetaxpayer’sreturnandtomakepaymentsonasemiannualbasisexceeds$2,000ingeneralexcisetaxesduringthecalendaryearorexceeds$4,000ingeneralexcisetaxesduringthecalendaryearifmakingpaymentsonaquarterlybasis,orifthedirectordeterminesthatanysuchquarterlyorsemiannualfilingofreturnwouldundulyjeopardizetheproperadministrationofthischapter,includingtheassessmentorcollectionofthegeneralexcisetax,thedirectormay,atanytime,revokeataxpayer’spermit,inwhichcasethetaxpayerwillthenberequiredtofilethetaxpayer’sreturnandmakepaymentsthereonashereinprovidedinsubsection(a).
[§237-30.5] Collection of rental by third party; filing with department; statement required. (a)EverypersonauthorizedunderanagreementbytheownerofrealpropertylocatedwithinthisStatetocollectrentonbehalfofsuchownershallbesubjecttothissection.
“HAWAII GENERAL EXCISE TAXES MUST BE PAID ON THE GROSS RENTS COLLECTED BY ANY PERSON RENTING REAL PROPERTY IN THE STATE OF HAWAII. A COPY OF THE FIRST PAGE OF THIS AGREEMENT, OR OF FEDERAL INTERNAL REVENUE FORM 1099 STATING THE AMOUNT OF RENTS COLLECTED, SHALL BE FILED WITH THE HAWAII DEPARTMENT OF TAXATION.”
(3) Commencingwithfiscalyear2018-2019,asumfromallgeneralexcisetaxrevenuesrealizedbytheStatethat represents the difference between the state public employer’s annual required contribution for theseparate trust fund established under section 87A-42 and the amount of the state public employer’scontributionsintothattrustfundshallbedepositedtothecreditoftheState’sannualrequiredcontributionintothattrustfundineachfiscalyear,asprovidedinsection87A-42.[L1935,c141,§12;RL1945,§5462;RL1955,§117-26;amLSp19592d,c1,§16;HRS§237-31;amL1981,c159,§1;amL1984,c163,§1;amL1985,c239,§1;amL1989,c368,§3;amL1990,c163,§3;amL1992,c209,§§1,6assupersededbyamL1993,c364,§25;amL1999,c110,§1,andc155,§4;amL2004,c115,§2;amL2006,c304,§§2,4;amL2009,c11,§3;amL2011,c62,§8;amL2013,c157,§2andc268,§9]
[§237-33.5] Federal assessments; adjustments of gross income or gross proceeds of sale; report to the department. [Section effective January 1, 1994] (a)Anypersonrequiredtoreporttothedepartmentbysection235-
(c) Thestatutoryperiod for theassessmentofanydeficiencyor thedeterminationofany refundattributabletothereportrequiredbythissectionshallnotexpirebeforetheexpirationofoneyearfromthedatethedepartmentis notified by the taxpayer or the InternalRevenueService,whichever is earlier, of such a report as provided insubsection(a).Beforetheexpirationofthisone-yearperiod,thedepartmentandthetaxpayermayagree,inwriting,totheextensionofthisperiod.Theperiodsoagreeduponmaybefurtherextendedbysubsequentagreementsinwritingmadebeforetheexpirationoftheperiodpreviouslyagreedupon.[L1993,c32,§1]
§237-34 Filing of returns; disclosure of returns unlawful, penalty; destruction of returns. (a)Allmonthlyandannualreturnsshallbetransmittedtotheofficeofthetaxationdistrictinwhichtheprivilegeuponwhichthetaxaccruedisexercised.Wheretheprivilegeisexercisedinmorethanonetaxationdistrictthereturnsshallbetransmittedtotheofficeofthefirstdistrict.
§237-36 Erroneous returns, disallowance of exemption, payment. If any returnmade is erroneous,or is sodeficientasnottodisclosethefulltaxliability,orifthetaxpayer,inthetaxpayer’sreturn,shalldisclaimliabilityforthetaxonanygrossincomeorgrossproceedsofsalesliabletothetax,orifthetaxpayershallmakeapplicationundersection237-23foranexemptiontowhichthetaxpayerisnotentitled,thedepartmentoftaxationshallcorrecttheerrororassesstheproperamountoftaxes.Ifsuchrecomputationresultsinanadditionaltaxliability,orifthedepartmentproposestoassessanygrossincomeorgrossproceedsofsalesbyreasonofthedisallowanceofanexemptionclaimedinthereturnorforwhichapplicationhasbeenfiled,thedepartmentshallfirstgivenoticetothetaxpayeroftheproposedassessment,andthetaxpayershallthereuponhaveanopportunitywithinthirtydaystoconferwiththedepartment.Aftertheexpirationofthirtydaysfromthenotificationthedepartmentshallassessthegrossincomeorgrossproceedsofsalesofthetaxpayeroranyportionthereofwhichthedepartmentbelieveshasnottheretoforebeenassessed,andshallgivenoticetothetaxpayeroftheamountofthetax,andtheamountthereofshallbepaidwithintwentydaysafterthedatethenoticewasmailed,properlyaddressedtothetaxpayeratthetaxpayer’slastknownaddressorplaceofbusiness.
§237-37 Refunds and credits. Iftheamountalreadypaidexceedsthatwhichshouldhavebeenpaidonthebasisofthetaxrecomputedasprovidedinsection237-36,theexcesssopaidshallbeimmediatelyrefundedtothetaxpayerinthemannerprovidedinsection231-23(c).Thetaxpayermay,atthetaxpayer’selection,applyanoverpaymentcredittotaxessubsequentlyaccruinghereunder.Allrefundsandthedetailsthereof,includingthenamesofthepersonsreceivingtherefundandtheamountrefundedshallbeaccessiblefortheinspectionofthepublicintheofficeofthedepartmentoftaxationinthetaxationdistrictinwhichthepersonreceivingtherefundmadetheperson’sreturns.
§237-38 Failure to make return. If anyperson fails,neglects,or refuses tomakea return, thedepartmentoftaxationmayproceedasitdeemsbesttoobtaininformationonwhichtobasetheassessmentofthetax.Afterprocuringtheinformationthedepartmentshallproceedtoassessthetaxasprovidedinsection237-36.Theassessmentshallbepresumedtobecorrectuntilandunless,uponanappealdulytakenasprovidedinthischapter,thecontraryshallbeclearlyprovedbythepersonassessed,andtheburdenofproofuponsuchappealshallbeuponthepersonassessedtodisprovethecorrectnessoftheassessment.[L1935,c141,§8;amL1941,c265,§6;RL1945,§5469;amL1953,c125,ptof§10;RL1955,§117-33;amLSp19592d,c1,§16;HRS§237-38]
(d) Any person refusing or neglecting to obey any summons issued by the department, and any individualappearingandrefusingto testifyunderoath,shallbefined$50for thefirstoffenseand$100foreachsucceedingoffense.[L1941,c265,§7;RL1945,§5470;RL1955,§117-34;amLSp19592d,c1,§16;HRS§237-39;amL1974,c139,§6;amL2017,c12,§50]
sixmonths; provided that if at the timeof the taxpayer’s return to theState theperiodof limitationsoncollectionafterassessmentwouldexpirebeforetheexpirationofsixmonthsfromthedateofthetaxpayer’sreturn,theperiodshallnotexpirebeforetheexpirationofthesixmonths.
§237-41 Records to be kept; examination. EverytaxpayershallkeepintheEnglishlanguagewithintheState,andpreserveforaperiodofthreeyears,suitablerecordsofgrossproceedsofsalesandgrossincome,andsuchotherbooks,recordsofaccount,andinvoicesasmayberequiredbythedepartmentoftaxation,andallsuchbooks,records,andinvoicesshallbeopenforexaminationatanytimebythedepartmentortheMultistateTaxCommissionpursuanttochapter255,ortheauthorizedrepresentativethereof.[L1935,c141,§22;amL1937,c202,§2;amL1943,c140,§1;RL1945,§5472;amL1945,c253,§10;RL1955,§117-36;amLSp19592d,c1,§16;HRS§237-41;amL1969,c274,§4;amL1974,c139,§7;amL1995,c92,§13]
§237-41.5 Certain amounts held in trust; liability of key individuals. (a)Thereshallbepersonalliabilityforthetaxesimposedunderthischapterasprovidedinthissectionforthefollowingamountsofgrossincomeorgrossproceeds:
(b) Thepurchaserofthepropertyshallwithholdpaymentofthepurchasepriceuntilthereceiptofacertificatefrom the department to the effect that all taxes, penalties, and interest levied or accrued under title 14 for taxesadministeredbythedepartmentagainsttheseller,orconstitutingalienupontheproperty,havebeenpaid.Acertificateshallnotbeissuedwhilethedepartmentinvestigates(includingbyaudit)whethertaxeshavebeenleviedoraccruedagainsttheseller.Thecertificateshallshowonitsfacethatthedepartmenthashadnoticeofthebulksaleortransfer,andshallalsoshowthenamesofthesellerandpurchaser,abriefdescriptionofthepropertysoldortransferred,andthedateofconsummationofthesaleortransfer,togetherwithsuchotherinformationasthedepartmentshallprescribe.
under title14 for taxesadministeredby thedepartmentagainst thesellerorconstitutinga lienupon theproperty,togetherwithpenaltiesandinterestthereafteraccruing,notexceeding,however,theamountofthepurchaseprice.Theissuanceofacertificateintheprescribedformshallbeacompletedefensetothebulksaleortransferliabilityimposedintheprecedingsentence,butshallnotbeadefensetoanyliabilityofthepurchaserunderanyotherprovisionoflawforliabilitiesandobligations.Anypurchasersucceedingtotheliabilitiesofthesellerunderthissectionshallmakeawrittenreportthereofuponthenextduedateforthereportingofgrossincometaxes.
§237-44 Entertainment business. (a)Asusedinthissection:“Admission”meanstheamountpaidforadmissiontoanyplace,includingadmissionbyseasonticketorsubscription,
(b) Every person receiving admissions for any circus, carnival, or any other place whatsoever at which atransienttaxpayerisengagedinbusiness(whetherornotfurtheradmissionsarechargedinsidetheplace,suchfurtheradmissions,ifany,beingalsosubjecttothissection),shallsetasidefromtheadmissionsandholdintrustfortheStatefivepercentoftheadmissions,orsuchlesseramountasthedepartmentoftaxationshallapproveassufficient, toguaranteepaymentofthetaxleviedbythischapteronthetransienttaxpayer.Theamountsorequiredtobesetasidefromtheadmissionsshallbedepositedwiththedepartmentpromptlyuponcollectionthereof,fromtimetotime,fordepositbyitinaspecialtrustfundinthetreasuryoftheState,theretoremainuntilrefundeduponvoucherofthedepartment,oruntilappliedtothepaymentofthetaxesguaranteedtherebywiththeconsentofthepersonmakingthedeposit,oruntildepositedincourtpursuanttochapter655ortherulesofcourt.Thedepartmentmaybringanactiontoobtainanadjudicationofitsrighttoapplytheguaranteefundinpaymentoftaxesandmaydepositthefundincourttoawaittheresultsoftheadjudication,ormaybesuedbyaninterestedpersonseekingtoobtaintheadjudicationandmaybeorderedtomakesuchdepositincourt,notwithstandingthatthedepartmentassertsaclaimagainstthefund.
§237-45 GENERAL EXCISE TAX LAW
CHAPTER237,Page52(UnofficialCompilation)
(c) If any person fails to deposit promptly the guarantee fund required by this section, the departmentmaydistrainupontheadmissionsoranybankaccountorotherassetinwhichthesamecanbefound,forthepurposeofobtaininganddepositinginthetreasurytherequiredguaranteefund.
§237-46 Collection by suit; injunction. Thedepartmentoftaxationmaycollecttaxesdueandunpaidunderthischapter,togetherwithallaccruedpenalties,byactioninassumpsitorotherappropriateproceedingsinthecircuitcourtofthejudicialcircuitinwhichtheprivilegetaxedhasbeenexercised.Afterdelinquencyshallhavecontinuedforsixtydays,orifanypersonlawfullyrequiredsotodounderthischaptershallfailtoapplyforandsecurealicenseasprovidedbythischapterforaperiodofsixtydaysafterthefirstdatewhenthepersonwasrequiredunderthischaptertosecurethesame,thedepartmentmayproceedinthecircuitcourtofthejudicialcircuitinwhichtheprivilegetaxedortaxablehasbeenexercised,toobtainaninjunctionrestrainingthefurtherexerciseoftheprivilegeuntilfullpaymentshallhavebeenmadeofalltaxesandpenaltiesandinterestdueunderthischapter,oruntilsuchlicenseissecured,orboth,asthecircumstancesofthecasemayrequire.[L1935,c141,§14;RL1945,§5478;amL1951,c165,§7;RL1955,§117-43;amLSp19592d,c1,§16;HRS§237-46;amimpL1984,c90,§1;gench1985;amL1989,c6,§5]
Rules of Court
Injunctions,seeHRCPrule65.
§237-47 District judges; concurrent civil jurisdiction in tax collections. Except as otherwise specificallyprovidedbythischapter,theseveraldistrictjudgesshallhaveconcurrentjurisdictionwiththecircuitcourtstohearanddetermineallcivilactionsatlawinassumpsitforthecollectionandenforcementofcollectionandpaymentofalltaxesassessedhereunder,irrespectiveoftheamountclaimed.[L1935,c141,§15;RL1945,§5479;RL1955,§117-44;HRS§237-47;amL1970,c188,§39]