§238-3  Application of tax, etc.  (a) The tax imposed by this chapter shall not apply to any property, services, orcontracting or to any use of the property, services, or contracting that cannotlegally be so taxed under the Constitution or laws of the United States, butonly so long as, and only to the extent to which the State is without power toimpose the tax.

To the extent that any exemption, exclusion, orapportionment is necessary to comply with the preceding sentence, the directorof taxation shall:

(1)  Exempt or exclude from the tax under thischapter, property, services, or contracting or the use of property, services,or contracting exempted under chapter 237; or

(2)  Apportion the gross value of services orcontracting sold to customers within the State by persons engaged in businessboth within and without the State to determine the value of that portion of theservices or contracting that is subject to taxation under chapter 237 for thepurposes of section 237-21.

Any provision of law to the contrarynotwithstanding, exemptions or exclusions from tax under this chapter allowedon or before April 1, 1978, under the provisions of the Constitution of theUnited States or an act of the Congress of the United States to persons orcommon carriers engaged in interstate or foreign commerce, or both, whetherocean-going or air, shall continue undiminished and be available thereafter.

(b)  The tax imposed by this chapter shall notapply to any use of property, services, or contracting the transfer of whichproperty, services, or contracting to, or the acquisition of which by, theperson so using the same, has actually been or actually is taxed under chapter237.

(c)  The tax imposed by this chapter shall bepaid only once upon or in respect of the same property, services, orcontracting; provided that nothing in this chapter contained shall be construedto exempt any property, services, or contracting, or the use thereof fromtaxation under any other law of the State.

(d)  The tax imposed by this chapter shall bein addition to any other taxes imposed by any other laws of the State, exceptas otherwise specifically provided herein; provided that if it be finally heldby any court of competent jurisdiction, that the tax imposed by this chaptermay not legally be imposed in addition to any other tax or taxes imposed by anyother law or laws with respect to the same property, services, or contracting,or the use thereof, then this chapter shall be deemed not to apply to theproperty, services, or contracting, or the use thereof under such specificcircumstances, but such other laws shall be given full effect with respect tothe property, services, or contracting, or use.

(e)  The tax imposed by this chapter shall notapply to any use of property exempted by section 238-4.

(f)  The tax imposed by this chapter shall notapply to any use or consumption of aircraft and vessels, the transfer of whichaircraft or vessel to, or the acquisition of which by, the person so using orconsuming the same, or the rental for the use of the aircraft or vessel, hasactually been or actually is taxed under chapter 237.

(g)  The tax imposed by this chapter shall notapply to any intoxicating liquor as defined in chapter 244D and cigarettes andtobacco products as defined in chapter 245, imported into the State and sold toany person or common carrier in interstate commerce, whether ocean-going orair, for consumption out-of- state by the person, crew, or passengers on theshipper's vessels or airplanes.

(h)  The tax imposed by this chapter shall notapply to any use of vessels constructed under section 189-25 prior to July 1,1969.

(i)  Each taxpayer liable for the tax imposedby this chapter on tangible personal property, services, or contracting shallbe entitled to full credit for the combined amount or amounts of legallyimposed sales or use taxes paid by the taxpayer with respect to the sametransaction and property, services, or contracting to another state and anysubdivision thereof, but such credit shall not exceed the amount of the use taximposed under this chapter on account of the transaction and property,services, or contracting.  The director of taxation may require the taxpayer toproduce the necessary receipts or vouchers indicating the payment of the salesor use tax to another state or subdivision as a condition for the allowance ofthe credit.

(j)  The tax imposed by this chapter shall notapply to any use of property, services, or contracting exempted by section237-26 or section 237-29.

(k)  The tax imposed by this chapter shall notapply to any use of air pollution control facility exempted by section237-27.5. [L 1965, c 155, pt of §2 and c 201, §41; Supp, §119-3; am L 1966, c28, §5; am L 1967, c 34, §1; HRS §238-3; am L 1969, c 181, §1; am L 1970, c 134,§2 and c 180, §16; am L 1979, c 74, §2; am L 1985, c 16, §9; gen ch 1985; am L1992, c 305, §2; am L 1993, c 220, §5; am L 1999, c 70, §5; am L 2000, c 198,§10]

 

Cross References

 

  Exemptions, see §§237-26, 237-29.

 

Case Notes

 

  Where comparison between out-of-state taxpayer and itsin-state counterpart shows tax advantage to the former, such taxpayer has noground to complain that tax violates the commerce clause or subsection (a) ofthis section.  58 H. 163, 566 P.2d 1091.

  Item ordered by exempt organization from out-of-statesuppliers for direct delivery to persons in Hawaii were subject to tax.  65 H.199, 649 P.2d 1126.