§238-1 - Definitions, generally.

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

"General excise tax law" means
chapter 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 tangible
property, services, or contracting owned, purchased from an unlicensed seller,
or however acquired, from any other part of the United States or its
possessions or from any foreign country, whether in interstate or foreign
commerce, or both; and

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

"Overhead" means continuous or
general costs occurring in the normal course of a business, including but not
limited to costs for labor, rent, taxes, royalties, interest, discounts paid,
insurance, lighting, heating, cooling, accounting, legal fees, equipment and
facilities, telephone systems, depreciation, and amortization.

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

"Price" means the total amount for
which 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 personal
property and prepaid telephone calling services but does not include newspapers
or other periodical publications purchased on the subscription plan, issued at
stated intervals as frequently as four times a year, and of the class admitted
to the United States mails as second class matter under the laws and
regulations governing the postal service on January 1, 1965.

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

"Purchaser" means any person
purchasing property, services, or contracting and "importer" means
any person importing property, services, or contracting, regardless if at the
time of importation, the property, services, or contracting is owned by the
importer, purchased from an unlicensed seller, or however acquired; provided
that the terms "purchaser" and "importer" shall not include
the State, its political subdivisions, or wholly owned agencies or
instrumentalities of the State or a political subdivision; or the United
States, its wholly owned agencies or instrumentalities, or any person immune
from the tax imposed by this chapter under the Constitution and laws of the
United States but the terms shall include national banks.

"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.

"Seller" means any person engaged in
the business of selling tangible personal property, services, or contracting,
wheresoever engaged, 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.

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

"Unlicensed seller" means any seller
who, with respect to the particular sale, is not subject to the tax imposed by
chapter 237, whether or not the seller holds a license under that chapter, but
does not include any seller with respect to any sale which is expressly
exempted from the tax imposed by chapter 237.

"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, 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;

(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);

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

(A) Licensed under chapter 237;

(B) Engaged in business as a contractor; and

(11) 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.

"Value" means fair and reasonable
cash value at the time of accrual of the tax. [L 1965, c 155, pt of §2 and c
201, §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 L
2002, c 40, §8; am L 2004, c 114, §2]

Note

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

Section 415-14 referred to in definition of
"representation" is repealed. For present provision, see chapter
414.

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 may
properly include freight charges. 56 H. 621, 547 P.2d 2.

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