§237-18 - Further provisions as to application of tax.

§237-18  Further provisions as to
application of tax.  (a)  Where a coin operated device produces gross
income which is divided between the owner or operator of the device, on the one
hand, and the owner or operator of the premises where the device is located, on
the other hand, the tax imposed by this chapter shall apply to each such person
with respect to the person's portion of the proceeds, and no more.

(b)  Where gate receipts or other admissions
are divided between the person furnishing or producing a play, concert,
lecture, athletic event, or similar spectacle (including any motion picture
showing) on the one hand, and a promoter (including any proprietor or other
operator of a motion picture house) offering the spectacle to the public, on
the other hand, the tax imposed by this chapter, if the promoter is subject to
the tax imposed by this chapter, shall apply only to the promoter measured by
the whole of the proceeds, and the promoter shall be authorized to deduct and
withhold from the portion of the proceeds payable to the person furnishing or
producing the spectacle the amount of the tax payable by the person upon such
portion.  No tax shall apply to a promoter with respect to such portion of the
proceeds as is payable to a person furnishing or producing the spectacle, who
is exempted by section 237-23 from taxation upon such activity.

(c)  Where, through the activity of a person
taxable under section 237-13(6), a product has been milled, processed, or
otherwise manufactured upon the order of another taxpayer who is a manufacturer
taxable upon the value of the entire manufactured products, which consists in
part of the value of the services taxable under section 237-13(6), so much
gross income as is derived from the rendering of the services shall be
subjected to tax on the person rendering the services at the rate of one-half
of one per cent, and the value of the entire product shall be included in the
measure of the tax imposed on the other taxpayer as elsewhere provided.

(d)  Where, through the activity of a person
taxable under section 237-13(6), there have been rendered to a cane planter
services consisting in the harvesting or hauling of the cane, or consisting in
road maintenance, under a contract between the person rendering the services and
the cane planter, covering the services and also the milling of the sugar, the
services of harvesting and hauling the cane and road maintenance shall be
treated the same as the service of milling the cane, as provided by subsection
(c), and the value of the entire product, manufactured or sold for the cane
planter under the contract, shall be included in the measure of the tax imposed
on the person as elsewhere provided.

(e)  Where insurance agents, including general
agents, subagents, or solicitors, who are not employees and are licensed
pursuant to chapter 431, or real estate brokers or salespersons, who are not
employees and are licensed pursuant to chapter 467, produce commissions which
are divided between such general agents, subagents, or solicitors, or between
such real estate brokers or salespersons, as the case may be, the tax levied
under section 237-13(6) as to real estate brokers or salespersons, or under
section 237-13(7) as to insurance general agents, subagents, or solicitors
shall apply to each such person with respect to the person's portion of the
commissions, and no more.

(f)  Where tourism related services are
furnished through arrangements made by a travel agency or tour packager and the
gross income is divided between the provider of the services and the travel
agency or tour packager, the tax imposed by this chapter shall apply to each
such person with respect to such person's respective portion of the proceeds,
and no more.

As used in this subsection "tourism
related services" means catamaran cruises, canoe rides, dinner cruises,
lei greetings, transportation included in a tour package, sightseeing tours not
subject to chapter 239, admissions to luaus, dinner shows, extravaganzas,
cultural and educational facilities, and other services rendered directly to
the customer or tourist, but only if the providers of the services other than
air transportation are subject to a four per cent tax under this chapter or
chapter 239.

(g)  Where transient accommodations are
furnished through arrangements made by a travel agency or tour packager at
noncommissioned negotiated contract rates and the gross income is divided
between the operator of transient accommodations on the one hand and the travel
agency or tour packager on the other hand, the tax imposed by this chapter
shall apply to each such person with respect to such person's respective
portion of the proceeds, and no more.

As used in this subsection, the words
"transient accommodations" and "operator" shall be defined
in the same manner as they are defined in section 237D-1.

(h)  Where the transportation of passengers or
property is furnished through arrangements between motor carriers, and the
gross income is divided between the motor carriers, any tax imposed by this
chapter shall apply to each motor carrier with respect to each motor carrier's
respective portion of the proceeds.

As used in this subsection:

"Carrier" means a person who engages
in transportation, and does not include a person such as a freight forwarder or
tour packager who provides transportation by contracting with others, except to
the extent that such person oneself engages in transportation.

"Contract carrier" means a person
other than a public utility as defined under section 239-2 or taxicab, which
under contracts or agreements, engages in the transportation of persons or
property for compensation, by land, water, or air.

"Motor carrier" means a common
carrier or contract carrier transporting persons or property for compensation
on the public highways, other than a public utility as defined under section
239-2 or taxicab.

"Public highways" has the meaning
defined by section 264-1 including both state and county highways, but
operation upon rails shall not be deemed transportation on the public highways.
[L 1949, c 252, §1; am L 1951, c 165, §4; am L 1953, c 68, §1; RL 1955,
§117-16; am L 1957, c 34, §6; am L Sp 1957, c 1, §3(v), (w), (x); am L 1959, c
257, §3; am L 1960, c 4, §6; am L 1963, c 87, §1; am L 1965, c 155, §14(1); HRS
§237-18; am L 1970, c 180, §11; am L 1977, c 198, §1; am L 1978, c 144, §3; gen
ch 1985; am L 1986, c 340, §7; am L 1988, c 167, §1; am L 1991, c 287, §1; gen
ch 1992; am L Sp 2001 3d, c 9, §3; am L 2003, c 135, §4]

Attorney General Opinions

  Hauling contractor rendering services on behalf of an
intermediary must report income at retail rate.  Att. Gen. Op. 64-9.

Case Notes

  Slaughterhouse operator, whose customers are wholesalers and
producers, is not a "manufacturer".  69 H. 125, 735 P.2d 935.