REPORT TITLE: 
GET; Professional Services


DESCRIPTION:
Exempts from the general excise tax all professional services
exported out of state.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                            1336        
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                     A BILL FOR AN ACT

RELATING TO THE GENERAL EXCISE TAX.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 237, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "237-     Exemption for services exported out of state.
 
 5 There shall be exempted from, and excluded from the measure of,
 
 6 taxes imposed by this chapter all of the value or gross proceeds
 
 7 derived from services performed in the State by a Hawaii service
 
 8 provider for an out-of-state customer where:
 
 9      (1)  The services performed in the State are exported and
 
10           resold, consumed, or used wholly outside the State; and
 
11      (2)  The gross income derived from the services performed
 
12           would otherwise be subject to taxation at the highest
 
13           rate under section 237-13(6), and (8), or equivalent
 
14           sections imposing the tax at the highest rate upon the
 
15           gross income derived from the rendering of services
 
16           under this chapter.
 
17      For the purposes of this section, the seller or person
 
18 rendering the services exported and resold, consumed, or used
 
19 outside the State shall take from the purchaser, a certificate 
 

 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 (or an equivalent), in the form as the department shall
 
 2 prescribe, certifying that the service purchased is to be resold
 
 3 or otherwise consumed or used outside the State.  Any purchaser
 
 4 who furnishes this certificate (or an equivalent specified by the
 
 5 department) shall be obligated to pay the seller or person
 
 6 rendering the services, upon demand, if the service purchased is
 
 7 not resold or otherwise consumed or used outside the State, the
 
 8 amount of the additional tax which by reason thereof is imposed
 
 9 upon the seller or person rendering the service."
 
10      SECTION 2.  Section 237-29.6, Hawaii Revised Statutes, is
 
11 repealed.
 
12      ["[237-29.6]  Exemption of certain computer services.(a)
 
13 There shall be exempted from, and excluded from the measure of,
 
14 the taxes imposed by this chapter all of the gross proceeds
 
15 arising from technical services necessary for the production and
 
16 sale of computer software where that software is shipped or
 
17 transmitted by the provider of technical services to a customer
 
18 at a point outside the State for use outside the State. 
 
19      As used in this section: 
 
20      "Computer software" means a set of computer programs,
 
21 procedures, or associated documentation concerned with the
 
22 operation and function of a computer system, and includes both
 

 
 
 
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                                     H.B. NO.           
                                                        
                                                        

 
 1 systems and application programs and subdivisions, such as
 
 2 assemblers, compilers, routines, generators, and utility
 
 3 programs. 
 
 4      "Technical services" include the development, design,
 
 5 modification, and programming of computer software. 
 
 6      (b)  For the purposes of this section, the provider of
 
 7 technical services shall take from the purchaser a certificate,
 
 8 in such form as the department shall prescribe, certifying that
 
 9 the software purchased is to be used outside the State.  Any
 
10 purchaser who shall furnish such a certificate shall be obligated
 
11 to pay to the provider of technical services, upon demand, if the
 
12 software purchased is used or sold by the purchaser in the State,
 
13 the amount of the additional tax which by reason of such use or
 
14 sale is imposed upon the provider of technical services."]
 
15      SECTION 3.  Statutory material to be repealed is bracketed.
 
16 New statutory material is underscored.
 
17      SECTION 4.  This Act shall take effect on July 1, 1999.
 
18 
 
19                           INTRODUCED BY:_________________________