Bill Text: HI SB1301 | 2018 | Regular Session | Introduced

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Bill Title: Relating To Use Tax.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Introduced - Dead) 2017-11-30 - Carried over to 2018 Regular Session. [SB1301 Detail]

Download: Hawaii-2018-SB1301-Introduced.html

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THE SENATE	S.B. NO.	1301
TWENTY-NINTH LEGISLATURE, 2017
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO USE TAX.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that as online purchases by residents from retailers located out-of-state increase, the State loses more and more tax revenues in cases where the taxpayers do not pay an appropriate amount of use taxes.  Use taxes are imposed on goods purchased out-of-state and are in lieu of our general excise taxes.

     The purpose of this Act is to enact a purchaser's use tax remittance that is similar to an existing law in Colorado to ensure that use taxes are collected.

     SECTION 2.  Chapter 238, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§238-    Purchaser's use tax remittance.  (a)  Every person subject to this chapter who uses, stores, or consumes tangible personal property in the conduct of a business in this State, which property is purchased outside this state, and who has not paid the use tax imposed by this chapter to a retailer shall make a return and remit the tax imposed by this section to the director of taxation for the preceding period covered by the remittance on forms prescribed, showing in detail the tangible personal property stored, used, or consumed by such person in the conduct of business within the State in the preceding period covered by the remittance if the use tax has not been paid.  If the cumulative tax due at the end of any month is in excess of $300, such person shall make a return and remit the tax due before the twentieth day of the following month.  If the total tax due in a calendar year is $300 or less, such person shall make a single return and remittance for such calendar year before January 20 of the following calendar year.

     (b)  Every person who is subject to this section who uses, stores, or consumes tangible personal property not in the conduct of a business, which is purchased outside this State, who has not paid the use tax imposed by this chapter, shall make a return and remit the tax annually, at the time the Hawaii income tax of such person is due and payable, on forms prescribed by the director of taxation, showing in detail the tangible personal property stored, used, or consumed by said persons within this State for the preceding taxable year.

     (c)  If a seller collects the use tax under this chapter, the amount of use tax shall be displayed separately from the advertised price listed on the forms or advertising matter on all sales checks, orders, sales slips, or other proof of sales."

     SECTION 3.  Section 238-1, Hawaii Revised Statutes, is amended as follows:

     1.  By amending the definition of "representation" to read:

     ""Representation" refers to any or all of the following:

     (1)  A seller being present in the State;

     (2)  A seller having in the State a salesperson, commission agent, manufacturer's representative, broker, or other person who is authorized or employed by the seller to assist the seller in selling property, services, or contracting for use or consumption in the State, by procuring orders for the sales, making collections or deliveries, or otherwise; [and]

     (3)  A seller having in the State a person upon whom process directed to the seller from the courts of the State may be served, including the director of commerce and consumer affairs and the deputy director in the cases provided in section 414-64[.]; or

     (4)  A seller who does not qualify for paragraphs (1) to (3), but who sells online or through the Internet to purchasers located in this State."

     2.  By amending the definition of "seller" to read:

     ""Seller" means any person engaged in the business of selling tangible personal property, services, or contracting, wheresoever engaged, including through online or internet sales, but does not include the United States or its wholly owned agencies or instrumentalities other than national banks, the State or a political subdivision thereof, or wholly owned agencies or instrumentalities of the State or a political subdivision."

     3.  By amending the definition of "use" to read:

     ""Use" (and any nounal, verbal, adjectival, adverbial, and other equivalent form of the term) herein used interchangeably means any use, whether the use is of such nature as to cause the property, services, or contracting to be appreciably consumed or not, or the keeping of the property or services for such use or for sale, the exercise of any right or power over tangible or intangible personal property incident to the ownership of that property, and shall include control over tangible or intangible property by a seller who is licensed or who should be licensed under chapter 237, who directs the importation of the property into the State for sale and delivery to a purchaser in the State, including through online or internet sales, liability and free on board (FOB) to the contrary notwithstanding, regardless of where title passes, but the term "use" shall not include:

     (1)  Temporary use of property, not of a perishable or quickly consumable nature, where the property is imported into the State for temporary use (not sale) therein by the person importing the same and is not intended to be, and is not, kept permanently in the State.  For example, without limiting the generality of the foregoing language:

         (A)  In the case of a contractor importing permanent equipment for the performance of a construction contract, with intent to remove, and who does remove, the equipment out of the State upon completing the contract;

         (B)  In the case of moving picture films imported for use in theaters in the State with intent or under contract to transport the same out of the State after completion of such use; and

         (C)  In the case of a transient visitor importing an automobile or other belongings into the State to be used by the transient visitor while therein but which are to be used and are removed upon the transient visitor's departure from the State;

     (2)  Use by the taxpayer of property acquired by the taxpayer solely by way of gift;

     (3)  Use which is limited to the receipt of articles and the return thereof, to the person from whom acquired, immediately or within a reasonable time either after temporary trial or without trial;

     (4)  Use of goods imported into the State by the owner of a vessel or vessels engaged in interstate or foreign commerce and held for and used only as ship stores for the vessels;

     (5)  The use or keeping for use of household goods, personal effects, and private automobiles imported into the State for nonbusiness use by a person who:

         (A)  Acquired them in another state, territory, district, or country;

         (B)  At the time of the acquisition was a bona fide resident of another state, territory, district, or country;

         (C)  Acquired the property for use outside the State; and

         (D)  Made actual and substantial use thereof outside this State;

          provided that as to an article acquired less than three months prior to the time of its importation into the State it shall be presumed, until and unless clearly proved to the contrary, that it was acquired for use in the State and that its use outside the State was not actual and substantial;

     (6)  The leasing or renting of any aircraft or the keeping of any aircraft solely for leasing or renting to lessees or renters using the aircraft for commercial transportation of passengers and goods or the acquisition or importation of any such aircraft or aircraft engines by any lessee or renter engaged in interstate air transportation.  For purposes of this paragraph, "leasing" includes all forms of lease, regardless of whether the lease is an operating lease or financing lease.  The definition of "interstate air transportation" is the same as in 49 U.S.C. 40102;

     (7)  The use of oceangoing vehicles for passenger or passenger and goods transportation from one point to another within the State as a public utility as defined in chapter 269;

     (8)  The use of material, parts, or tools imported or purchased by a person licensed under chapter 237 which are used for aircraft service and maintenance, or the construction of an aircraft service and maintenance facility as those terms are defined in section 237-24.9;

     (9)  The use of services or contracting imported for resale where the contracting or services are for resale, consumption, or use outside the State pursuant to section 237-29.53(a); and

    (10)  The use of property, services, or contracting imported by foreign diplomats and consular officials who are holding cards issued or authorized by the United States Department of State granting them an exemption from state taxes.

     With regard to purchases made and distributed under the authority of chapter 421, a cooperative association shall be deemed the user thereof."

     SECTION 4.  This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Use Tax; Purchaser's Use Tax; Online and Internet Sales

 

Description:

Clarifies the obligation between the seller and purchaser to pay use taxes.  Clarifies definitions of "representation", "seller", and "use" to include online and internet sales.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.