§239-2  Definitions.  As used in this
chapter unless otherwise required by the context:



"Carrier" means a person who engages
in transportation, and does not include a person such as freight forwarder or
tour packager who provides transportation by contracting with others, except to
the extent that such person oneself engages in transportation.



"Contract carrier" means a person
other than a public utility or taxicab which, under contracts or agreements,
engages in the transportation of persons or property for compensation, by land,
water, or air.



"Gross income" means the gross income
from public service company business as follows:



(1)  Gross income from the production, conveyance,
transmission, delivery, or furnishing of light, power, heat, cold, water, gas,
or oil;



(2)  Gross income from the transportation of
passengers or freight, or the conveyance or transmission of telephone or
telegraph messages other than mobile telecommunications services, or the
furnishing of facilities for the transmission of intelligence by electricity,
by land or water or air:



(A)  Originating and terminating within this
State;



(B)  By means of vessels or aircraft having
their home port in the State and operating between ports or airports in the
State, with respect to the transportation so effected; or



(C)  By means of plant or equipment located in
the State, between points in the State;



(3)  Gross income from the transportation of freight
by motor carriers (other than as stated in paragraph (2)), or the conveyance or
transmission of messages or intelligence through wires or cables located or
partly located in the State (other than as stated in paragraph (2) or (5));



(4)  Gross income from the operation of a private
sewer company or private sewer facility; or



(5)  With respect to a home service provider of mobile
telecommunications services, "gross income" includes charges billed
for mobile telecommunications services provided by a home service provider to a
customer with a place of primary use in this State when the mobile telecommunications
services originate and terminate within the same state; provided that all such
charges for mobile telecommunications services that are billed by or for the
home service provider are deemed to be provided by the home service provider at
the customer's place of primary use, regardless of where the mobile
telecommunications services originate, terminate, or pass through.  "Gross
income" shall not include:



(A)  Any charges for or receipts from mobile
telecommunications services provided to customers of the home service provider
whose place of primary use is outside this State;



(B)  Any receipts of a home service provider
acting as a serving carrier providing mobile telecommunications services to
another home service provider's customer; and



(C)  Any receipts specifically from interstate
or foreign mobile telecommunications services taxable under section
237-13(6)(D), as determined by the home service provider's books and records
kept in the ordinary course of business.



For the purposes of this paragraph,
"customer", "home service provider", "mobile
telecommunications services", "place of primary use", and
"serving carrier" have the same meaning as in section 239-22.



The words "gross income" and
"gross income from public service company business" shall not be
construed to include dividends (as defined by section 235-1) paid by one member
of an affiliated public service company group to another member of the same
group; or gross income from the sale or transfer of materials or supplies, interest
on loans, or the provision of engineering, construction, maintenance, or
managerial services by one member of an affiliated public service company group
to another member of the same group.  "Affiliated public service company
group" means an affiliated group of domestic corporations within the
meaning of chapter 235, all of the members of which are public service
companies.  "Member of an affiliated public service company group"
means a corporation (including the parent corporation) that is included within an
affiliated public service company group.



Where the transportation of passengers or
property is furnished through arrangements between motor carriers, and the
gross income is divided between the motor carriers, any tax imposed by this
chapter shall apply to each motor carrier with respect to each motor carrier's
respective portion of the proceeds.



Where tourism related services are furnished
through arrangements made by a travel agency or tour packager and the gross
income is divided between the provider of the services on the one hand and the
travel agency or tour packager on the other hand, any tax imposed by this
chapter shall apply to each person with respect to each person's respective
portion of the proceeds.



Accounts found to be worthless and actually
charged off for income tax purposes, at corresponding periods, may be deducted
from gross income as specified under this chapter so far as the accounts
reflect taxable sales, but shall be added to gross income when and if
subsequently collected.



As used in this paragraph, "tourism
related services" means motor carriers of passengers regulated by the
public utilities commission.



"Home port" means the place where
vessels or aircraft have their tax situs or principal tax situs.



"Motor carrier" means a common
carrier or contract carrier transporting persons or property for compensation
on the public highways, other than a public utility or taxicab.



The "net operating income" of a
public utility subject to the tax rate imposed by section 239-5(a) is the
operating revenues less the operating expenses and tax accruals, including in
the computation of such revenues and expenses, debits and credits arising from
equipment rents and joint facility rents.  In the event that, but for this
sentence, deductions could not be had for expenses of services because such
services were rendered by the same person or persons constituting the public
utility or could not be had for income taxes, because such taxes were levied
against the person or persons constituting the public utility in the person's
or their individual capacity and not as a separate entity, there nevertheless
shall be allowed as deductions in computing the net operating income (A) a
reasonable allowance for the value of personal services actually rendered, and
(B) such proportion of the actual amount of income taxes, federal and state, as
fairly represents the portion of the income so taxed which was derived from the
public utility business.



"Partner" means the same as in the
Internal Revenue Code.



"Partnership" means the same as in
the Internal Revenue Code.



"Ports", "airports", or
"points in the State" shall be deemed to be such if they are loading,
unloading, transshipment, assembly, transfer, or relay points.



"Public highways" has the meaning
defined by section 264-1 including both state and county highways, but
operation upon rails shall not be deemed transportation on the public highways.



"Public service company" means a
public utility, motor carrier, or contract carrier.



"Public utility" has the meaning
given that term in section 269-1. [L 1932 2d, c 43, §2; RL 1935, §2141; RL
1945, §5672; am L 1945, c 78, §1; RL 1955, §126-2; am L Sp 1957, c 1, §9(b); am
L 1963, c 147, §2(c); HRS §239-2; am L 1977, c 26, §1; gen ch 1985; am L 1986,
c 308, §1; gen ch 1993; am L 1997, c 178, §§7, 11; am L 1998, c 125, §1; am L
2002, c 209, §4; am L 2005, c 146, §2; am L 2008, c 16, §8]



 



Case Notes



 



  "Gross income", "net operating income",
defined.  34 H. 269, aff'd 105 F.2d 286.



  The portion of tariff rates reflecting value of equipment
owned by taxpayer's customer is not income earned by taxpayer.  57 H. 477, 559
P.2d 283.



  "Gross income" from conveyance or transmission of
telephone messages or furnishing of facilities for transmission of intelligence
by electricity construed.  61 H. 572, 608 P.2d 383.