REPORT TITLE:
General Excise Tax


DESCRIPTION:
Eliminates intermediaries general excise tax application and
substitutes resale of services at one-half per cent.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           501
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO TAXATION.



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

 1      SECTION 1.  The legislature finds that in 1970, Act 180 was
 
 2 passed to ensure the wholesale treatment of services sold for
 
 3 resale.  The intent was to treat intermediary services as being
 
 4 sold at wholesale in a manner similar to the sale of tangible
 
 5 personal property at wholesale so that the services resold would
 
 6 only be taxed to the person rendering the services at the
 
 7 one-half per cent tax rate.  As enacted in 1970, intermediary
 
 8 services only applied to nonprofessional services.  In 1983,
 
 9 Act 206 amended the definition of services in section 237-7,
 
10 Hawaii Revised Statutes (HRS), by deleting the word
 
11 "nonprofessional".  The intent of this amendment, as clearly
 
12 stated in legislative committee reports, was to allow
 
13 professional services to be treated in the same manner as
 
14 nonprofessional services and to allow professional services to
 
15 qualify for intermediary service taxation.
 
16      Unfortunately, since the enactment of the law, the treatment
 
17 of intermediary services and what services qualify for this
 
18 treatment has been unclear.  One problem concerns the treatment
 
19 of professional services.  In amending section 237-7, HRS, the
 

 
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 1 legislature left intact provisions in the law relating to the
 
 2 separate taxation of professional services under
 
 3 section 237-13(8), HRS.  This has led taxpayers to question
 
 4 whether professional services should be treated under
 
 5 section 237-13(8), HRS, or under section 237-13(6), HRS, which
 
 6 covers all types of services and contains the provision for the
 
 7 treatment of intermediary services.  When first enacted in 1935,
 
 8 professional services and nonprofessional services were taxed at
 
 9 different general excise tax rates, thereby justifying the
 
10 separate provisions contained in section 237-13, HRS.  In 1939,
 
11 the different tax rates were eliminated.  After almost fifty
 
12 years of professional and nonprofessional services being taxed at
 
13 the same rate, continued retention of the different provisions
 
14 under section 237-13, HRS, is no longer necessary and only serves
 
15 to confuse the taxpayer.
 
16      Additionally, the legislature finds that the intermediary
 
17 services provisions of the general excise tax law which focus on
 
18 the first taxpayer who sells services to a second taxpayer who in
 
19 turn delivers the first taxpayer's services to the consumer with
 
20 or without the other services provided by the second taxpayer is
 
21 not practical or easy to apply because the first taxpayer may not
 
22 know when or if the second taxpayer will deliver the first
 
23 taxpayer's services to the consumer.  If the first taxpayer does
 

 
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 1 not know of the second taxpayer's transaction, the first taxpayer
 
 2 cannot use the favorable general excise tax rate of one-half per
 
 3 cent.  A more appropriate and practical approach is to focus on
 
 4 the second taxpayer and authorize the second taxpayer to apply
 
 5 the reduced tax rate of one-half per cent on the amount of gross
 
 6 income received by the second taxpayer for services performed by
 
 7 the first taxpayer.
 
 8      The purpose of this Act is to make clear that professional
 
 9 services are eligible for the favorable intermediary services
 
10 rate of one-half per cent, to ensure that intermediary services
 
11 income is taxed at the favorable one-half per cent tax rate, to
 
12 eliminate the current provisions relating to the treatment of
 
13 intermediary services, which are confusing and poorly understood,
 
14 to substitute in their entirety provisions making clear that the
 
15 wholesale of services both professional and nonprofessional
 
16 qualify for the beneficial general excise tax rate of one-half
 
17 per cent, and to repeal as unnecessary and confusing the separate
 
18 existing provisions covering professional services.
 
19      SECTION 2.  Chapter 237, Hawaii Revised Statutes, is amended
 
20 by adding a new section to be appropriately designated and to
 
21 read as follows:
 
22      "237-    Treatment of wholesale services.  (a)  This
 
23 section relates to the wholesale of services and applies to all
 

 
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 1 service businesses under section 237-7.
 
 2      (b)  A wholesale sale of services by a taxpayer occurs
 
 3 where:
 
 4      (1)  The services are acquired by the taxpayer from a
 
 5           licensed person on behalf of the ultimate recipient or
 
 6           in connection with the rendering of services by the
 
 7           taxpayer to the ultimate recipient.  The services may
 
 8           or may not be furnished pursuant to an existing
 
 9           contract between the licensed person and the taxpayer;
 
10      (2)  The taxpayer has not consumed the services; provided
 
11           that the taxpayer must bill the ultimate recipient
 
12           separately for those services; and
 
13      (3)  The licensed person furnishing the taxpayer with
 
14           services is subject to the four per cent tax rate under
 
15           this chapter upon the gross income or gross proceeds
 
16           received by the licensed person for the services
 
17           furnished to the taxpayer.
 
18      (c)  A deduction shall be allowed from the gross proceeds or
 
19 gross income of the taxpayer in an amount calculated by
 
20 multiplying the gross amount paid by the taxpayer for the
 
21 services acquired from the licensed person by .875.
 
22      The amount calculated shall be deducted from the taxpayer's
 
23 total reported gross proceeds or gross income.  The deduction
 

 
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 1 allowed by this subsection may be taken by fiscal and calendar
 
 2 year taxpayers.  All deductions claimed under this section shall
 
 3 be accompanied by the name and general excise tax number of the
 
 4 licensed person furnishing the services to the taxpayer.
 
 5      (d)  The taxpayer shall obtain from the licensed person a
 
 6 certificate in a form that the department prescribes certifying
 
 7 that the licensed person is subject to tax at the rate of four
 
 8 per cent under this chapter on the gross proceeds or gross income
 
 9 received from the taxpayer.  The absence of the certificate, if
 
10 required, is itself a presumption that the taxpayer is not
 
11 allowed a deduction under this section.
 
12      (e)  A wholesale of services does not occur when the
 
13 business activity involves the production or sale of tangible
 
14 personal property, contracting, or retailing.  Any services
 
15 involved in those business activities shall not be severable and
 
16 shall not qualify for a deduction under this section.
 
17      (f)  As used in this section:
 
18      "Licensed person" means a person licensed under this chapter
 
19 to engage in a service business or calling under section 237-7.
 
20      "Taxpayer" means any person subject to taxation under
 
21 section 237-13(6).
 
22      "Ultimate recipient" means a person who receives the
 
23 services or the benefits of the services and who uses or consumes
 

 
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 1 the services."
 
 2       SECTION 3.  Section 237-13, Hawaii Revised Statutes, is
 
 3 amended to read as follows:
 
 4      "237-13  Imposition of tax.  There is hereby levied and
 
 5 shall be assessed and collected annually privilege taxes against
 
 6 persons on account of their business and other activities in the
 
 7 State measured by the application of rates against values of
 
 8 products, gross proceeds of sales, or gross income, whichever is
 
 9 specified, as follows:
 
10      (1)  Tax on manufacturers.
 
11           (A)  Upon every person engaging or continuing within
 
12                the State in the business of manufacturing,
 
13                including compounding, canning, preserving,
 
14                packing, printing, publishing, milling,
 
15                processing, refining, or preparing for sale,
 
16                profit, or commercial use, either directly or
 
17                through the activity of others, in whole or in
 
18                part, any article or articles, substance or
 
19                substances, commodity or commodities, the amount
 
20                of the tax to be equal to the value of the
 
21                articles, substances, or commodities,
 
22                manufactured, compounded, canned, preserved,
 
23                packed, printed, milled, processed, refined, or
 

 
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 1                prepared, for sale, as shown by the gross proceeds
 
 2                derived from the sale thereof by the manufacturer
 
 3                or person compounding, preparing, or printing
 
 4                them, multiplied by one-half of one per cent.
 
 5           (B)  The measure of the tax on manufacturers is the
 
 6                value of the entire product for sale, regardless
 
 7                of the place of sale or the fact that deliveries
 
 8                may be made to points outside the State.
 
 9           (C)  If any person liable for the tax on manufacturers
 
10                ships or transports the person's product, or any
 
11                part thereof, out of the State, whether in a
 
12                finished or unfinished condition, or sells the
 
13                same for delivery outside of the State (for
 
14                example, consigned to a mainland purchaser via
 
15                common carrier f.o.b. Honolulu), the value of the
 
16                products in the condition or form in which they
 
17                exist immediately before entering interstate or
 
18                foreign commerce, determined as hereinafter
 
19                provided, shall be the basis for the assessment of
 
20                the tax imposed by this paragraph.  This tax shall
 
21                be due and payable as of the date of entry of the
 
22                products into interstate or foreign commerce,
 
23                whether the products are then sold or not.  The
 

 
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 1                department of taxation shall determine the basis
 
 2                for assessment, as provided by this paragraph, as
 
 3                follows:
 
 4                (i)  If the products at the time of their entry
 
 5                     into interstate or foreign commerce already
 
 6                     have been sold, the gross proceeds of sale,
 
 7                     less the transportation expenses, if any,
 
 8                     incurred in realizing the gross proceeds for
 
 9                     transportation from the time of entry of the
 
10                     products into interstate or foreign commerce,
 
11                     including insurance and storage in transit,
 
12                     shall be the measure of the value of the
 
13                     products.
 
14               (ii)  If the products have not been sold at the
 
15                     time of their entry into interstate or
 
16                     foreign commerce, and in cases governed by
 
17                     clause (i) in which the products are sold
 
18                     under circumstances such that the gross
 
19                     proceeds of sale are not indicative of the
 
20                     true value of the products, the value of the
 
21                     products constituting the basis for
 
22                     assessment shall correspond as nearly as
 
23                     possible to the gross proceeds of sales for
 

 
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 1                     delivery outside the State, adjusted as
 
 2                     provided in clause (i), or if sufficient data
 
 3                     are not available, sales in the State, of
 
 4                     similar products of like quality and
 
 5                     character and in similar quantities, made by
 
 6                     the taxpayer (unless not indicative of the
 
 7                     true value) or by others.  Sales outside the
 
 8                     State, adjusted as provided in clause (i),
 
 9                     may be considered when they constitute the
 
10                     best available data.  The department shall
 
11                     prescribe uniform and equitable rules for
 
12                     ascertaining the values.
 
13              (iii)  At the election of the taxpayer and with the
 
14                     approval of the department, the taxpayer may
 
15                     make the taxpayer's returns under clause (i)
 
16                     even though the products have not been sold
 
17                     at the time of their entry into interstate or
 
18                     foreign commerce.
 
19               (iv)  In all cases in which products leave the
 
20                     State in an unfinished condition, the basis
 
21                     for assessment shall be adjusted so as to
 
22                     deduct the portion of the value as is
 
23                     attributable to the finishing of the goods
 

 
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 1                     outside the State.
 
 2      (2)  Tax on business of selling tangible personal property;
 
 3           producing.
 
 4           (A)  Upon every person engaging or continuing in the
 
 5                business of selling any tangible personal property
 
 6                whatsoever (not including, however, bonds or other
 
 7                evidence of indebtedness, or stocks), there is
 
 8                likewise hereby levied, and shall be assessed and
 
 9                collected, a tax equivalent to four per cent of
 
10                the gross proceeds of sales of the business;
 
11                provided that insofar as certain retailing is
 
12                taxed by section 237-16, the tax shall be that
 
13                levied by section 237-16, and in the case of a
 
14                wholesaler, the tax shall be equal to one-half of
 
15                one per cent of the gross proceeds of sales of the
 
16                business.  Upon every person engaging or
 
17                continuing within this State in the business of a
 
18                producer, the tax shall be equal to one-half of
 
19                one per cent of the gross proceeds of sales of the
 
20                business, or the value of the products, for sale,
 
21                if sold for delivery outside the State or shipped
 
22                or transported out of the State, and the value of
 
23                the products shall be determined in the same
 

 
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 1                manner as the value of manufactured products
 
 2                covered in the cases under paragraph (1)(C).
 
 3           (B)  Gross proceeds of sales of tangible property in
 
 4                interstate and foreign commerce shall constitute a
 
 5                part of the measure of the tax imposed on persons
 
 6                in the business of selling tangible personal
 
 7                property, to the extent, under the conditions, and
 
 8                in accordance with the provisions of the
 
 9                Constitution of the United States and the Acts of
 
10                the Congress of the United States which may be now
 
11                in force or may be hereafter adopted, and whenever
 
12                there occurs in the State an activity to which,
 
13                under the Constitution and Acts of Congress, there
 
14                may be attributed gross proceeds of sales, the
 
15                gross proceeds shall be so attributed.
 
16           (C)  No manufacturer or producer, engaged in such
 
17                business in the State and selling the
 
18                manufacturer's or producer's products for delivery
 
19                outside of the State (for example, consigned to a
 
20                mainland purchaser via common carrier f.o.b.
 
21                Honolulu), shall be required to pay the tax
 
22                imposed in this chapter for the privilege of so
 
23                selling the products, and the value or gross
 

 
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 1                proceeds of sales of the products shall be
 
 2                included only in determining the measure of the
 
 3                tax imposed upon the manufacturer or producer.
 
 4           (D)  When a manufacturer or producer, engaged in such
 
 5                business in the State, also is engaged in selling
 
 6                the manufacturer's or producer's products in the
 
 7                State at wholesale, retail, or in any other
 
 8                manner, the tax for the privilege of engaging in
 
 9                the business of selling the products in the State
 
10                shall apply to the manufacturer or producer as
 
11                well as the tax for the privilege of manufacturing
 
12                or producing in the State, and the manufacturer or
 
13                producer shall make the returns of the gross
 
14                proceeds of the wholesale, retail, or other sales
 
15                required for the privilege of selling in the
 
16                State, as well as making the returns of the value
 
17                or gross proceeds of sales of the products
 
18                required for the privilege of manufacturing or
 
19                producing in the State.  The manufacturer or
 
20                producer shall pay the tax imposed in this chapter
 
21                for the privilege of selling its products in the
 
22                State, and the value or gross proceeds of sales of
 
23                the products, thus subjected to tax, may be
 

 
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 1                deducted insofar as duplicated as to the same
 
 2                products by the measure of the tax upon the
 
 3                manufacturer or producer for the privilege of
 
 4                manufacturing or producing in the State; except
 
 5                that no producer of agricultural products who
 
 6                sells the products to a purchaser who will process
 
 7                the products outside the State shall be required
 
 8                to pay the tax imposed in this chapter for the
 
 9                privilege of producing or selling those products.
 
10           (E)  A taxpayer selling to a federal cost-plus
 
11                contractor may make the election provided for by
 
12                paragraph (3)(C), and in that case the tax shall
 
13                be computed pursuant to the election,
 
14                notwithstanding this paragraph or paragraph (1) to
 
15                the contrary.
 
16           (F)  The department, by rule, may provide that a seller
 
17                may take from the purchaser of tangible personal
 
18                property a certificate, in a form as the
 
19                department shall prescribe, certifying that the
 
20                sale is a sale at wholesale.  If the certificate
 
21                is so provided for by rule of the department:
 
22                (i)  Any purchaser who furnishes a certificate
 
23                     shall be obligated to pay to the seller, upon
 

 
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 1                     demand, if the sale in fact is not at
 
 2                     wholesale, the amount of the additional tax
 
 3                     which by reason thereof is imposed upon the
 
 4                     seller; and
 
 5               (ii)  The absence of a certificate, unless the
 
 6                     sales of the business are exclusively at
 
 7                     wholesale, in itself shall give rise to the
 
 8                     presumption that the sale is not at
 
 9                     wholesale.
 
10      (3)  Tax upon contractors.
 
11           (A)  Upon every person engaging or continuing within
 
12                the State in the business of contracting, the tax
 
13                shall be equal to four per cent of the gross
 
14                income of the business; provided that insofar as
 
15                the business of contracting is taxed by section
 
16                237-16, which relates to certain retailing, the
 
17                tax shall be that levied by section 237-16.
 
18           (B)  In computing the tax levied under this paragraph
 
19                or section 237-16, there shall be deducted from
 
20                the gross income of the taxpayer so much thereof
 
21                as has been included in the measure of the tax
 
22                levied under subparagraph (A) or section 237-16,
 
23                on:
 

 
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                                     S.B. NO.           501
                                                        
                                                        

 
 1                (i)  Another taxpayer who is a contractor, as
 
 2                     defined in section 237-6;
 
 3               (ii)  A specialty contractor, duly licensed by the
 
 4                     department of commerce and consumer affairs
 
 5                     pursuant to section 444-9, in respect of the
 
 6                     specialty contractor's business; or
 
 7              (iii)  A specialty contractor who is not licensed by
 
 8                     the department of commerce and consumer
 
 9                     affairs pursuant to section 444-9, but who
 
10                     performs contracting activities on federal
 
11                     military installations and nowhere else in
 
12                     this State;
 
13                but any person claiming a deduction under this
 
14                paragraph shall be required to show in the
 
15                person's return the name and general excise number
 
16                of the person paying the tax on the amount
 
17                deducted by the person.
 
18           (C)  In computing the tax levied under this paragraph
 
19                against any federal cost-plus contractor, there
 
20                shall be excluded from the gross income of the
 
21                contractor so much thereof as fulfills the
 
22                following requirements:
 
23                (i)  The gross income exempted shall constitute
 

 
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 1                     reimbursement of costs incurred for
 
 2                     materials, plant, or equipment purchased from
 
 3                     a taxpayer licensed under this chapter, not
 
 4                     exceeding the gross proceeds of sale of the
 
 5                     taxpayer on account of the transaction; and
 
 6               (ii)  The taxpayer making the sale shall have
 
 7                     certified to the department that the taxpayer
 
 8                     is taxable with respect to the gross proceeds
 
 9                     of the sale, and that the taxpayer elects to
 
10                     have the tax on gross income computed the
 
11                     same as upon a sale to the state government.
 
12           (D)  A person who, as a business or as a part of a
 
13                business in which the person is engaged, erects,
 
14                constructs, or improves any building or structure,
 
15                of any kind or description, or makes, constructs,
 
16                or improves any road, street, sidewalk, sewer, or
 
17                water system, or other improvements on land held
 
18                by the person (whether held as a leasehold, fee
 
19                simple, or otherwise), upon the sale or other
 
20                disposition of the land or improvements, even if
 
21                the work was not done pursuant to a contract,
 
22                shall be liable to the same tax as if engaged in
 
23                the business of contracting, unless the person
 

 
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 1                shows that at the time the person was engaged in
 
 2                making the improvements it was, and for the period
 
 3                of at least one year after completion of the
 
 4                building, structure, or other improvements, it
 
 5                continued to be the person's purpose to hold and
 
 6                not sell or otherwise dispose of the land or
 
 7                improvements.  The tax in respect of the
 
 8                improvements shall be measured by the amount of
 
 9                the proceeds of the sale or other disposition that
 
10                is attributable to the erection, construction, or
 
11                improvement of such building or structure, or the
 
12                making, constructing, or improving of the road,
 
13                street, sidewalk, sewer, or water system, or other
 
14                improvements.  The measure of tax in respect of
 
15                the improvements shall not exceed the amount which
 
16                would have been taxable had the work been
 
17                performed by another, subject as in other cases to
 
18                the deductions allowed by subparagraph (B).  Upon
 
19                the election of the taxpayer, this paragraph may
 
20                be applied notwithstanding the improvements were
 
21                not made by the taxpayer, or were not made as a
 
22                business or as a part of a business, or were made
 
23                with the intention of holding the same.  However,
 

 
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                                     S.B. NO.           501
                                                        
                                                        

 
 1                this paragraph shall not apply in respect of any
 
 2                proceeds that constitute or are in the nature of
 
 3                rent; all such gross income shall be taxable under
 
 4                paragraph [(10);] (9); provided that insofar as
 
 5                the business of renting or leasing real property
 
 6                under a lease is taxed under section 237-16.5, the
 
 7                tax shall be levied under section 237-16.5.
 
 8      (4)  Tax upon theaters, amusements, radio broadcasting
 
 9           stations, etc.  Upon every person engaging or
 
10           continuing within the State in the business of
 
11           operating a theater, opera house, moving picture show,
 
12           vaudeville, amusement park, dance hall, skating rink,
 
13           radio broadcasting station, or any other place at which
 
14           amusements are offered to the public, the tax shall be
 
15           equal to four per cent of the gross income of the
 
16           business.
 
17      (5)  Tax upon sales representatives, etc.  Upon every person
 
18           classified as a representative or purchasing agent
 
19           under section 237-1, engaging or continuing within the
 
20           State in the business of performing services for
 
21           another, other than as an employee, there is likewise
 
22           hereby levied and shall be assessed and collected a tax
 
23           equal to four per cent of the commissions and other
 

 
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                                     S.B. NO.           501
                                                        
                                                        

 
 1           compensation attributable to the services so rendered
 
 2           by the person.
 
 3      (6)  Tax on service business.  Upon every person engaging or
 
 4           continuing within the State in any service business or
 
 5           calling, including those engaging or continuing within
 
 6           the State in the practice of a profession, not
 
 7           otherwise specifically taxed under this chapter, there
 
 8           is likewise hereby levied and shall be assessed and
 
 9           collected a tax equal to four per cent of the gross
 
10           income of the business; [provided that where any person
 
11           engaging or continuing within the State in any service
 
12           business or calling renders those services upon the
 
13           order of or at the request of another taxpayer who is
 
14           engaged in the service business and who, in fact, acts
 
15           as or acts in the nature of an intermediary between the
 
16           person rendering those services and the ultimate
 
17           recipient of the benefits of those services, so much of
 
18           the gross income as is received by the person rendering
 
19           the services shall be subjected to the tax at the rate
 
20           of one-half of one per cent and all of the gross income
 
21           received by the intermediary from the principal shall
 
22           be subjected to a tax at the rate of four per cent;
 
23           and] provided that where any person is engaged in the
 

 
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                                     S.B. NO.           501
                                                        
                                                        

 
 1           business of selling interstate or foreign common
 
 2           carrier telecommunication services within and without
 
 3           the State, the tax shall be imposed on that portion of
 
 4           gross income received by a person from service which is
 
 5           originated or terminated in this State and is charged
 
 6           to a telephone number, customer, or account in this
 
 7           State notwithstanding any other state law (except for
 
 8           the exemption under section 237-23(a)(1)) to the
 
 9           contrary.  If, under the Constitution and laws of the
 
10           United States, the entire gross income as determined
 
11           under this paragraph of a business selling interstate
 
12           or foreign common carrier telecommunication services
 
13           cannot be included in the measure of the tax, the gross
 
14           income shall be apportioned as provided in
 
15           section 237-21; provided that the apportionment factor
 
16           and formula shall be the same for all persons providing
 
17           those services in the State.
 
18      (7)  Tax on insurance solicitors and agents.  Upon every
 
19           person engaged as a licensed solicitor, general agent,
 
20           or subagent pursuant to chapter 431, there is hereby
 
21           levied and shall be assessed and collected a tax equal
 
22           to .15 per cent of the commissions due to that
 
23           activity.
 

 
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                                     S.B. NO.           501
                                                        
                                                        

 
 1     [(8)  Professions.  Upon every person engaging or continuing
 
 2           within the State in the practice of a profession,
 
 3           including those expounding the religious doctrines of
 
 4           any church, there is likewise hereby levied and shall
 
 5           be assessed and collected a tax equal to four per cent
 
 6           of the gross income on the practice or exposition.
 
 7      (9)] (8)  Tax on receipts of sugar benefit payments.  Upon
 
 8           the amounts received from the United States government
 
 9           by any producer of sugar (or the producer's legal
 
10           representative or heirs), as defined under and by
 
11           virtue of the Sugar Act of 1948, as amended, or other
 
12           Acts of the Congress of the United States relating
 
13           thereto, there is hereby levied a tax of one-half of
 
14           one per cent of the gross amount received, provided
 
15           that the tax levied hereunder on any amount so received
 
16           and actually disbursed to another by a producer in the
 
17           form of a benefit payment shall be paid by the person
 
18           or persons to whom the amount is actually disbursed,
 
19           and the producer actually making a benefit payment to
 
20           another shall be entitled to claim on the producer's
 
21           return a deduction from the gross amount taxable
 
22           hereunder in the sum of the amount so disbursed.  The
 
23           amounts taxed under this paragraph shall not be taxable
 

 
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                                     S.B. NO.           501
                                                        
                                                        

 
 1           under any other paragraph, subsection, or section of
 
 2           this chapter.
 
 3    [(10)] (9)  Tax on other business.  Upon every person engaging
 
 4           or continuing within the State in any business, trade,
 
 5           activity, occupation, or calling not included in the
 
 6           preceding paragraphs or any other provisions of this
 
 7           chapter, there is likewise hereby levied and shall be
 
 8           assessed and collected, a tax equal to four per cent of
 
 9           the gross income thereof.  In addition, the rate
 
10           prescribed by this paragraph shall apply to a business
 
11           taxable under one or more of the preceding paragraphs
 
12           or other provisions of this chapter, as to any gross
 
13           income thereof not taxed thereunder as gross income or
 
14           gross proceeds of sales or by taxing an equivalent
 
15           value of products, unless specifically exempted."
 
16      SECTION 4.  Statutory material to be repealed is bracketed.
 
17 New statutory material is underscored.
 
18      SECTION 5.  This Act shall take effect on July 1, 1999, and
 
19 shall apply to gross proceeds or gross income received after
 
20 June 30, 1999.
 
21 
 
22                           INTRODUCED BY:  _______________________