§237-20  Principles applicable in certain
situations.  A person or company having shareholders or members (a
corporation, association, group, trust, partnership, joint adventure, or other
person) is taxable upon its business with them, and they are taxable upon their
business with it.  A person or company, whether or not called a cooperative,
through which shareholders or members are pursuing a common objective (for
example, the obtaining of property or services for their individual businesses
or use, or the marketing of their individual products) is a taxable person, and
such facts do not give rise to any tax exemption or tax benefit except as
specifically provided.  Even though a business has some of the aspects of
agency it shall not be so regarded unless it is a true agency.  The
reimbursement of costs or advances made for or on behalf of one person by
another shall not constitute gross income of the latter, unless the person
receiving such reimbursement also receives additional monetary consideration for
making such costs or advances. [L 1957, c 34, §11(i); am L 1965, c 201, §24;
Supp, §117-17.1; am L 1967, c 297, §2; HRS §237-20; am L 1985, c 303, §1; am L
1986, c 340, §8]



 



Law Journals and Reviews



 



  Rule of Strict Construction in Tax Cases, a Question of
Classification or Exemption, Arthur B. Reinwald, 11 HBJ 98.



 



Case Notes



 



  Amounts received from manufacturer by taxpayer for warranty
service work constituted, not reimbursement, but taxable gross income.  56 H.
321, 536 P.2d 91.



  "Cost" means monetary amount paid out by taxpayer
for property or service furnished by a third party.  56 H. 321, 536 P.2d 91.



  Payments by joint venture to member for services rendered
joint venture were subject to general excise taxation.  59 H. 307, 582 P.2d
703.



  Taxpayer partnership's provision of medical equipment and
ancillary services to its joint venture constituted "business" under
§237-2 and was thus made subject to the general excise tax by this section.  93
H. 267 (App.), 999 P.2d 865.



  The reimbursement provision of this section did not apply to
taxpayer where taxpayer did not pay any costs or made any advances to the
landlords and the record did not indicate that the taxpayer received a
reimbursement of a cost or advance.  110 H. 25, 129 P.3d 528.