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

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

"Contract carrier" means a personother 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 incomefrom 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 ofpassengers or freight, or the conveyance or transmission of telephone ortelegraph messages other than mobile telecommunications services, or thefurnishing of facilities for the transmission of intelligence by electricity,by land or water or air:

(A)  Originating and terminating within thisState;

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

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

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

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

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

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

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

(C)  Any receipts specifically from interstateor foreign mobile telecommunications services taxable under section237-13(6)(D), as determined by the home service provider's books and recordskept in the ordinary course of business.

For the purposes of this paragraph,"customer", "home service provider", "mobiletelecommunications 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 beconstrued to include dividends (as defined by section 235-1) paid by one memberof an affiliated public service company group to another member of the samegroup; or gross income from the sale or transfer of materials or supplies, intereston loans, or the provision of engineering, construction, maintenance, ormanagerial services by one member of an affiliated public service company groupto another member of the same group.  "Affiliated public service companygroup" means an affiliated group of domestic corporations within themeaning of chapter 235, all of the members of which are public servicecompanies.  "Member of an affiliated public service company group"means a corporation (including the parent corporation) that is included within anaffiliated public service company group.

Where the transportation of passengers orproperty is furnished through arrangements between motor carriers, and thegross income is divided between the motor carriers, any tax imposed by thischapter shall apply to each motor carrier with respect to each motor carrier'srespective portion of the proceeds.

Where tourism related services are furnishedthrough arrangements made by a travel agency or tour packager and the grossincome is divided between the provider of the services on the one hand and thetravel agency or tour packager on the other hand, any tax imposed by thischapter shall apply to each person with respect to each person's respectiveportion of the proceeds.

Accounts found to be worthless and actuallycharged off for income tax purposes, at corresponding periods, may be deductedfrom gross income as specified under this chapter so far as the accountsreflect taxable sales, but shall be added to gross income when and ifsubsequently collected.

As used in this paragraph, "tourismrelated services" means motor carriers of passengers regulated by thepublic utilities commission.

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

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

The "net operating income" of apublic utility subject to the tax rate imposed by section 239-5(a) is theoperating revenues less the operating expenses and tax accruals, including inthe computation of such revenues and expenses, debits and credits arising fromequipment rents and joint facility rents.  In the event that, but for thissentence, deductions could not be had for expenses of services because suchservices were rendered by the same person or persons constituting the publicutility or could not be had for income taxes, because such taxes were leviedagainst the person or persons constituting the public utility in the person'sor their individual capacity and not as a separate entity, there neverthelessshall be allowed as deductions in computing the net operating income (A) areasonable allowance for the value of personal services actually rendered, and(B) such proportion of the actual amount of income taxes, federal and state, asfairly represents the portion of the income so taxed which was derived from thepublic utility business.

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

"Partnership" means the same as inthe 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 meaningdefined by section 264-1 including both state and county highways, butoperation upon rails shall not be deemed transportation on the public highways.

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

"Public utility" has the meaninggiven that term in section 269-1. [L 1932 2d, c 43, §2; RL 1935, §2141; RL1945, §5672; am L 1945, c 78, §1; RL 1955, §126-2; am L Sp 1957, c 1, §9(b); amL 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 L2002, 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 equipmentowned by taxpayer's customer is not income earned by taxpayer.  57 H. 477, 559P.2d 283.

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