Report Title:

General Excise Tax; Definition of Engaging in Business

 

Description:

Amends the definition of engaging in business under section 237-2, HRS (general excise tax), to include persons who enter into an agreement with residents of the State where the person pays a commission for referral of potential customers.

 


HOUSE OF REPRESENTATIVES

H.B. NO.

1405

TWENTY-FIFTH LEGISLATURE, 2009

 

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:

 


SECTION 1. Section 237-2, Hawaii Revised Statutes, is amended to read as follows:

"237-2 "Business", "engaging" in business, defined. "Business" as used in this chapter, includes all activities (personal, professional, or corporate), engaged in or caused to be engaged in with the object of gain or economic benefit either direct or indirect, but does not include casual sales.

The term "engaging" as used in this chapter with reference to engaging or continuing in business also includes [the]:

(1) The exercise of corporate or franchise powers[.]; and

(2) The sale of tangible personal property or services taxable by a person soliciting business through an independent contractor or other representative if the person enters into an agreement with a resident of this State under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by a link on an internet website or otherwise, to the person, if the cumulative gross receipts from sales by the person to customers in the State who are referred to the person by such a resident, is in excess of $10,000 during the preceding four quarterly periods ending on the last day of February, May, August, and November. This presumption may be rebutted by proof that the resident with whom the person has an agreement did not engage in any solicitation in the State on behalf of the person that would satisfy the nexus requirement of the United States Constitution during the four quarterly periods in question."

SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 3. The department of taxation shall adopt rules interpreting and providing guidance for section 237-2, Hawaii Revised Statutes, as amended by this Act.

SECTION 4. This Act shall take effect on July 1, 2009.

 

INTRODUCED BY:

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