§238-1  Definitions, generally. Whenever used in this chapter, unless otherwise required by the context:

"General excise tax law" meanschapter 237, as amended from time to time.

"Import" (or any nounal, verbal,adverbial, adjective, or other equivalent of the term) includes:

(1)  The importation into the State of tangibleproperty, services, or contracting owned, purchased from an unlicensed seller,or however acquired, from any other part of the United States or itspossessions or from any foreign country, whether in interstate or foreigncommerce, or both; and

(2)  The sale and delivery of tangible personalproperty owned, purchased from an unlicensed seller, or however acquired, by aseller who is or should be licensed under the general excise tax law from anout-of-state location to an in-state purchaser, regardless of the free on boardpoint or the place where title to the property transfers to the purchaser.

"Overhead" means continuous orgeneral costs occurring in the normal course of a business, including but notlimited to costs for labor, rent, taxes, royalties, interest, discounts paid,insurance, lighting, heating, cooling, accounting, legal fees, equipment andfacilities, telephone systems, depreciation, and amortization.

"Person", "business","engaging in business", "retailer","wholesaler",  "jobber", and "contractor" havethe meanings defined by chapter 237.

"Price" means the total amount forwhich tangible personal property, services, or contracting are purchased,valued in money, whether paid in money or otherwise, and wheresoever paid;provided that cash discounts allowed and taken on sales shall not be included.

"Property" means tangible personalproperty and prepaid telephone calling services but does not include newspapersor other periodical publications purchased on the subscription plan, issued atstated intervals as frequently as four times a year, and of the class admittedto the United States mails as second class matter under the laws andregulations governing the postal service on January 1, 1965.

"Purchase" and "sale" meansany transfer, exchange, or barter, conditional or otherwise, in any manner orby any means, wheresoever consummated, of tangible personal property, services,or contracting for a consideration.

"Purchaser" means any personpurchasing property, services, or contracting and "importer" meansany person importing property, services, or contracting, regardless if at thetime of importation, the property, services, or contracting is owned by theimporter, purchased from an unlicensed seller, or however acquired; providedthat the terms "purchaser" and "importer" shall not includethe State, its political subdivisions, or wholly owned agencies orinstrumentalities of the State or a political subdivision; or the UnitedStates, its wholly owned agencies or instrumentalities, or any person immunefrom the tax imposed by this chapter under the Constitution and laws of theUnited States but the terms shall include national banks.

"Representation" refers to any or allof 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 isauthorized or employed by the seller to assist the seller in selling property,services, or contracting for use or consumption in the State, by procuringorders for the sales, making collections or deliveries, or otherwise; and

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

"Seller" means any person engaged inthe business of selling tangible personal property, services, or contracting,wheresoever engaged, but does not include the United States or its wholly ownedagencies or instrumentalities other than national banks, the State or apolitical subdivision thereof, or wholly owned agencies or instrumentalities ofthe State or a political subdivision.

"Service business or calling"includes all activities engaged in for other persons for a consideration thatinvolve the rendering of a service as distinguished from the sale of tangiblepersonal property or the production and sale of tangible property. "Service business or calling" includes professional services, butdoes not include services rendered by an employee to the employee's employer.

"Unlicensed seller" means any sellerwho, with respect to the particular sale, is not subject to the tax imposed bychapter 237, whether or not the seller holds a license under that chapter, butdoes not include any seller with respect to any sale which is expresslyexempted from the tax imposed by chapter 237.

"Use" (and any nounal, verbal,adjectival, adverbial, and other equivalent form of the term) herein usedinterchangeably means any use, whether the use is of such nature as to causethe property, services, or contracting to be appreciably consumed or not, orthe keeping of the property or services for such use or for sale, the exerciseof any right or power over tangible or intangible personal property incident tothe ownership of that property, and shall include control over tangible orintangible property by a seller who is licensed or who should be licensed underchapter 237, who directs the importation of the property into the State forsale and delivery to a purchaser in the State, liability and free on board(FOB) to the contrary notwithstanding, regardless of where title passes, butthe term "use" shall not include:

(1)  Temporary use of property, not of a perishable orquickly consumable nature, where the property is imported into the State fortemporary use (not sale) therein by the person importing the same and is notintended 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 importingpermanent equipment for the performance of a construction contract, with intentto remove, and who does remove, the equipment out of the State upon completingthe contract;

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

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

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

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

(4)  Use of goods imported into the State by the ownerof a vessel or vessels engaged in interstate or foreign commerce and held forand 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 fornonbusiness use by a person who:

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

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

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

(D)  Made actual and substantial use thereofoutside this State;

provided that as to an article acquired less thanthree months prior to the time of its importation into the State it shall bepresumed, until and unless clearly proved to the contrary, that it was acquiredfor use in the State and that its use outside the State was not actual andsubstantial;

(6)  The leasing or renting of any aircraft or thekeeping of any aircraft solely for leasing or renting to lessees or rentersusing the aircraft for commercial transportation of passengers and goods or theacquisition or importation of any such aircraft or aircraft engines by anylessee or renter engaged in interstate air transportation.  For purposes ofthis paragraph, "leasing" includes all forms of lease, regardless ofwhether 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 orpassenger and goods transportation from one point to another within the Stateas a public utility as defined in chapter 269;

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

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

(10)  The use of contracting imported or purchased by acontractor as defined in section 237-6 who is:

(A)  Licensed under chapter 237;

(B)  Engaged in business as a contractor; and

(C)  Subject to the tax imposed under section238-2.3; and

(11)  The use of property, services, or contractingimported by foreign diplomats and consular officials who are holding cardsissued or authorized by the United States Department of State granting them anexemption from state taxes.

With regard to purchases made and distributedunder the authority of chapter 421, a cooperative association shall be deemedthe user thereof.

"Value" means fair and reasonablecash value at the time of accrual of the tax. [L 1965, c 155, pt of §2 and c201, §40; Supp, §119-1; HRS §238-1; am L 1971, c 4, §6; am L 1974, c 144, §2;am L 1981, c 167, §4; am L 1982, c 204, §8; am L 1983, c 124, §17 and c 167, §4;am L 1985, c 270, §4; gen ch 1985, 1993; am L 1997, c 107, §4; am L 1999, c 70,§4; am L 2000, c 27, §2, c 38, §3, and 198, §7; am L 2001, c 210, §3; am L2002, c 40, §8; am L 2004, c 114, §2]

 

Note

 

  The 2004 amendment is retroactive to taxable years beginningafter December 31, 1998.  L 2004, c 114, §7.

  Section 415-14 referred to in definition of"representation" is repealed.  For present provision, see chapter414.

 

Cross References

 

  Sale of prepaid telephone calling services, see §237-13.8.

 

Attorney General Opinions

 

  Federal credit union within definition of"purchaser" and immune from tax.  Att. Gen. Op. 65-29.

 

Case Notes

 

  "Value" as the fair and reasonable value mayproperly include freight charges.  56 H. 621, 547 P.2d 2.

  Under the plain language of this section, Delawarecorporation was not subject to the use tax where the sale of books was directlyfrom the corporation to the state library; the corporation did not import thebooks from an unlicensed seller, nor did it purchase the books and"resell" the goods to the library and thus could not have importedfrom itself or purchased from itself.  103 H. 359, 82 P.3d 804.