§238-2.3  Imposition of tax on importedservices or contracting; exemptions.  There is hereby levied an excise taxon the value of services or contracting as defined in section 237-6 that areperformed by an unlicensed seller at a point outside the State and imported orpurchased for use in this State.  The tax imposed by this chapter shall accruewhen the service or contracting as defined in section 237-6 is received by theimporter or purchaser and becomes subject to the taxing jurisdiction of theState.  The rates of the tax hereby imposed and the exemptions from the tax areas follows:

(1)  If the importer or purchaser is licensed underchapter 237 and is:

(A)  Engaged in a service business or callingin which the imported or purchased services or contracting become identifiableelements, excluding overhead, of the services rendered by the importer orpurchaser, and the gross income of the importer or purchaser is subject to thetax imposed under chapter 237 on services at the rate of one-half of one percent or the rate of tax imposed under section 237-13.3; or

(B)  A manufacturer importing or purchasingservices or contracting that become identifiable elements, excluding overhead,of a finished or saleable product (including the container or package in whichthe product is contained) and the finished or saleable product is to be sold ina manner that results in a further tax on the manufacturer as a wholesaler, andnot a retailer;

there shall be no tax imposed on the value of theimported or purchased services or contracting; provided that if themanufacturer is also engaged in business as a retailer as classified underchapter 237, paragraph (2) shall apply to the manufacturer, but the director oftaxation shall refund to the manufacturer, in the manner provided under section231-23(c), that amount of tax that the manufacturer, to the satisfaction of thedirector, shall establish to have been paid by the manufacturer to the directorwith respect to services that have been used by the manufacturer for thepurposes stated in this paragraph.

(2)  If the importer or purchaser is a person licensedunder chapter 237 and is:

(A)  Engaged in a service business or callingin which the imported or purchased services or contracting become identifiableelements, excluding overhead, of the services rendered by the importer orpurchaser, and the gross income from those services when sold by the importeror purchaser is subject to the tax imposed under chapter 237 at the highestrate;

(B)  A manufacturer importing or purchasingservices or contracting that become identifiable elements, excluding overhead,of the finished or saleable manufactured product (including the container orpackage in which the product is contained) and the finished or saleable productis to be sold in a manner that results in a further tax under chapter 237 onthe activity of the manufacturer as a retailer; or

(C)  A contractor importing or purchasingservices or contracting that become identifiable elements, excluding overhead,of the finished work or project required, under the contract, and where thegross proceeds derived by the contractor are subject to the tax under section237-13(3) as a contractor,

the tax shall be one-half of one per cent of thevalue of the imported or purchased services or contracting; and

(3)  In all other cases, the importer or purchaser issubject to the tax at the rate of four per cent on the value of the imported orpurchased services or contracting. [L 1999, c 70, §2; am L 2000, c 198, §9; amL 2003, c 135, §6; am L 2004, c 114, §4]

 

Note

 

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