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.

"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 those revenues and expenses, debits and credits arising from equipment rents and joint facility rents. If, but for this sentence, deductions could not be had for expenses of services because the services were rendered by the same person or persons constituting the public utility or could not be had for income taxes, because the 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:

(1) Reasonable allowance for the value of personal services actually rendered; and

(2) Proportion of the actual amount of income taxes, federal and state, that fairly represents the portion of the income so taxed that 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; am L 2017, c 12, 53]

 

Case Notes

 

"Gross income", "net operating income", defined. 34 H. 269 (1937), aff'd 105 F.2d 286 (1939).

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 (1977).

"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 (1980).

 

 

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