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



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



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



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



there shall be no tax; provided that if the
wholesaler, 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 the
wholesaler, jobber, or manufacturer, in the manner provided under section
231-23(c) such amount of tax as the wholesaler, jobber, or manufacturer shall,
to the satisfaction of the director, establish to have been paid by the
wholesaler, jobber, or manufacturer to the director with respect to property
which has been used by the wholesaler, jobber, or manufacturer for the purposes
stated in this paragraph;



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



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



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



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



(D)  A person engaged in a service business or
calling as defined in section 237-7, or a person furnishing transient
accommodations subject to the tax imposed by section 237D-2, in which the
import or purchase of tangible personal property would have qualified as a sale
at wholesale as defined in section 237-4(a)(8) had the seller of the property
been subject to the tax in chapter 237; or



(E)  A publisher of magazines or similar
printed materials containing advertisements, when the publisher is under
contract with the advertisers to distribute a minimum number of magazines or
similar 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 magazines
or similar printed materials,



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



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



For purposes of this section, tangible personal
property 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 the
property, passes to the purchaser of the property at a location outside this
State. [L 1965, c 155, pt of §2; Supp, §119-2; HRS §238-2; gen ch 1985; am L
1999, 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 beginning
after December 31, 1998.  L 2004, c 114, §7.



 



Attorney General Opinions



 



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



 



Case Notes



 



  Calculation of purchase price and freight charges held to be
fair 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 on
interstate commerce.  56 H. 621, 547 P.2d 2.



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



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



  Under the plain language of §238-1, 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.