§238-2  Imposition of tax on tangiblepersonal property; exemptions.  There is hereby levied an excise tax on theuse in this State of tangible personal property which is imported by a taxpayerin this State whether owned, purchased from an unlicensed seller, or howeveracquired for use in this State.  The tax imposed by this chapter shall accruewhen the property is acquired by the importer or purchaser and becomes subjectto the taxing jurisdiction of the State.  The rates of the tax hereby imposedand the exemptions thereof are as follows:

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

(A)  A wholesaler or jobber importing orpurchasing for purposes of sale or resale; or

(B)  A manufacturer importing or purchasingmaterial or commodities which are to be incorporated by the manufacturer into afinished or saleable product (including the container or package in which theproduct is contained) wherein it will remain in such form as to be perceptibleto the senses, and which finished or saleable product is to be sold in suchmanner as to result in a further tax on the activity of the manufacturer as themanufacturer or as a wholesaler, and not as a retailer,

there shall be no tax; provided that if thewholesaler, jobber, or manufacturer is also engaged in business as a retailer(so classed under chapter 237), paragraph (2) shall apply to the wholesaler,jobber, or manufacturer, but the director of taxation shall refund to thewholesaler, jobber, or manufacturer, in the manner provided under section231-23(c) such amount of tax as the wholesaler, jobber, or manufacturer shall,to the satisfaction of the director, establish to have been paid by thewholesaler, jobber, or manufacturer to the director with respect to propertywhich has been used by the wholesaler, jobber, or manufacturer for the purposesstated in this paragraph;

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

(A)  A retailer or other person importing orpurchasing for purposes of sale or resale, not exempted by paragraph (1);

(B)  A manufacturer importing or purchasingmaterial or commodities which are to be incorporated by the manufacturer into afinished or saleable product (including the container or package in which theproduct is contained) wherein it will remain in such form as to be perceptibleto the senses, and which finished or saleable product is to be sold at retailin this State, in such manner as to result in a further tax on the activity ofthe manufacturer in selling such products at retail;

(C)  A contractor importing or purchasingmaterial or commodities which are to be incorporated by the contractor into thefinished work or project required by the contract and which will remain in suchfinished work or project in such form as to be perceptible to the senses;

(D)  A person engaged in a service business orcalling as defined in section 237-7, or a person furnishing transientaccommodations subject to the tax imposed by section 237D-2, in which theimport or purchase of tangible personal property would have qualified as a saleat wholesale as defined in section 237-4(a)(8) had the seller of the propertybeen subject to the tax in chapter 237; or

(E)  A publisher of magazines or similarprinted materials containing advertisements, when the publisher is undercontract with the advertisers to distribute a minimum number of magazines orsimilar printed materials to the public or defined segment of the public,whether or not there is a charge to the persons who actually receive the magazinesor similar printed materials,

the tax shall be one-half of one per cent of thepurchase price of the property, if the purchase and sale are consummated inHawaii; or, if there is no purchase price applicable thereto, or if thepurchase or sale is consummated outside of Hawaii, then one-half of one percent of the value of such property; and

(3)  In all other cases, four per cent of the value ofthe property.

For purposes of this section, tangible personalproperty is property that is imported by the taxpayer for use in this State,notwithstanding the fact that title to the property, or the risk of loss to theproperty, passes to the purchaser of the property at a location outside thisState. [L 1965, c 155, pt of §2; Supp, §119-2; HRS §238-2; gen ch 1985; am L1999, c 71, §8; am L 2000, c 198, §8 and c 271, §2; am L 2004, c 114, §3]

 

Note

 

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

 

Attorney General Opinions

 

  General excise and use taxes may be applied to importedgoods, no longer in transit, regardless of whether imported goods are in theiroriginal packages.  Att. Gen. Op. 94-2.

 

Case Notes

 

  Calculation of purchase price and freight charges held to befair reflection of value of imported equipment.  56 H. 621, 547 P.2d 2.

  Freight charges may be properly included in determining"value", the use tax base; such inclusion does not impose burden oninterstate commerce.  56 H. 621, 547 P.2d 2.

  Parts imported by taxpayer and used in its repair andmaintenance work did not, under the record, constitute goods imported forresale.  58 H. 163, 566 P.2d 1091.

  Where appellant argued that use tax imposed on its importedfood products pursuant to chapter 238 violated commerce clause, appellant wastreated equally with similarly situated taxpayers.  76 H. 1, 868 P.2d 419.

  Under the plain language of §238-1, Delaware corporation wasnot subject to the use tax where the sale of books was directly from thecorporation to the state library; the corporation did not import the books froman unlicensed seller, nor did it purchase the books and "resell" thegoods to the library and thus could not have imported from itself or purchasedfrom itself.  103 H. 359, 82 P.3d 804.