§239-9  Time of application of tax and otherprovisions.  (a)  In general.  The tax imposed by this chapter applies toevery public service company:

(1)  Which is in business at the commencement of acalendar year, as of January 1 of that year;

(2)  Which begins business after the commencement of acalendar year, as of the commencement of business.

(b)  Third year of doing business; earlieryears, how governed.  If the company is in business at the commencement of thecalendar year, and was in business during the whole of the preceding year andprior thereto, the tax shall be returned and paid as provided in sections 239-4and 239-7.

However, if subsection (a)(2) applies, or ifthe company though in business at the commencement of the calendar year was notin business during the preceding year, or was in business during the precedingyear or a part thereof but not prior thereto, the tax shall be returned andpaid as provided in subsections (c) and (d).

(c)  First year of doing business.  The measureof the tax for the year in which the company begins business is an estimate ofthe gross income of the public service company for that year or for the part ofthat year in which it is in business.

The tax thereon for the year in which thecompany begins business shall be at the following rate:

(1)  If subsection (a)(2) applies, at the rate of fourper cent, or

(2)  If subsection (a)(1) applies but the companythough in business at the commencement of the calendar year was not in businessduring any part of the preceding year, the tax shall be at the rate provided bysections 239-5 and 239-6, except that there shall be no adjustment of the rateof tax on account of the ratio of the net income to the gross income being inexcess of fifteen per cent and it shall be assumed for purposes of thissubsection and subsection (e) that the ratio is fifteen per cent or less.

The estimate shall be made and the tax returnedon or before the twentieth day of the third month after the month in which thecompany begins business and shall be subject to adjustment by the filing of anamended return as provided in subsection (e).  Payment of the tax shallaccompany the return unless time for payment is extended by the director oftaxation.  The extension may be granted by the director in order to provide forpayment of the tax in installments during the remainder of the taxable year.

(d)  Second year of doing business.  Themeasure of the tax for the year following the year in which the company beganbusiness is an estimate of the average gross income for a taxable year, subjectto adjustment by the filing of an amended return as provided in subsection(e).  The estimate shall be made and the tax returned and paid at the timesprovided for other companies which are in business at the commencement of thecalendar year.  The tax thereon shall be at the rate provided by sections 239-5and 239-6, except that there shall be no adjustment of the rate of tax onaccount of the ratio of the net income to the gross income being in excess of fifteenper cent and it shall be assumed for purposes of this subsection and subsection(e) that the ratio is fifteen per cent or less.

(e)  Adjustment of estimates.  An amendedreturn shall be filed after the close of the applicable taxable year for eachyear for which an estimated tax return was filed under subsection (c) or (d).

If the year for which the estimate is made isthe year in which the company commenced doing business and subsection (c)applies, any variance between the estimate and the actual gross income for thatyear shall be adjusted and a credit or refund made, or payment of additionaltax due, depending upon whether the estimate was in excess of, or less than,the actual gross income of the company for that year.

If the year for which the estimate is made isthe year following the year in which the company commenced doing business andsubsection (d) applies, the average monthly gross income during the period fromand after the commencement of business to the close of the year for which the estimatewas made shall be determined and multiplied by twelve.  Any variance betweenthe estimate and the amount so computed shall be adjusted and a credit orrefund made, or payment of additional tax due, depending upon whether theestimate was in excess of, or less than, the amount computed.

The amended return shall be made and filed andany additional tax due paid on or before the twentieth day of the fourth monthfollowing the close of the taxable year in which the company commencedbusiness.

The adjustment of the tax imposed under thischapter and the making of an amended return as provided under this sectionshall apply only to the first and second taxable years of doing business.

(f)  Acquisition of business of anothercompany.  Whenever any public service company subject for any year to the taximposed by this chapter, shall have acquired by purchase or otherwise duringthe preceding year the business or any part thereof of another public servicecompany liable to tax under this chapter for the preceding year but not liablefor the year following the sale or disposition, and the acquiring companycontinues the operation of the business so acquired, the gross income to bereported by the acquiring company for the purpose of determining the amount ofits tax under this chapter for the year following the year in which thebusiness was so acquired shall include, in addition to the gross income of theacquiring company during the year ending December 31 or fiscal year preceding,whichever is applicable, the gross income of the business or part thereof soacquired for the portion of the preceding year as the business was not operatedby the acquiring company.

This subsection shall not apply to any companywhose tax for the year involved is measured under subsection (c) by an estimateof gross income for the year subject to adjustment after the close of the year.

If the first paragraph of this subsectionapplies but the tax of the acquiring company for the year is governed bysubsection (d) and adjusted under subsection (e), then in determining theaverage monthly gross income for that purpose there shall be included, inaddition to the gross income of the acquiring company for the period involvedin the determination of the average, the gross income of the business or partthereof acquired by the company for the portion of that period in which thebusiness was not operated by the acquiring company.

(g)  Consolidation or merger.  Whenever thereis a consolidation or merger of public service companies, liability to the taximposed by this chapter shall attach to the company thus formed and the grossincome which shall be used for measuring the tax of the company thus formedshall include the gross income of the companies which were consolidated ormerged. [L 1963, c 147, §2(j); am L 1965, c 155, §19; Supp, §126-7.5; HRS§239-9; am L 1991, c 25, §3]