Taxation of Online Travel Companies; TAT; GET
Assesses the Transient Accommodations Tax and General Excise Tax on online travel companies that facilitate transient accommodations over the Internet. (HB1585 HD1)
HOUSE OF REPRESENTATIVES
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO THE TAXATION OF ONLINE TRAVEL COMPANIES.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Chapter 231, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
"§231- Online transient accommodations facilitators; nexus presumptions. Notwithstanding any law to the contrary, an online transient accommodations facilitator that has its commercial domicile in another state is presumed to be systematically and regularly engaging in business in this state and taxable under chapters 235, 237, and 237D, if, during any year, it receives income from engaging in online transient accommodations facilitation services or activities in this state, and the online transient accommodations facilitator:
(1) Obtains or solicits business from twenty or more persons within this state; or
(2) The sum of the value of its income, gross proceeds of sale, gross rental, or gross rental proceeds, taxable under chapter 235, 237, or 237D, attributable to sources in this state, equals to or exceeds $100,000."
SECTION 2. Section 237D-1, Hawaii Revised Statutes, is amended by adding two new definitions to be appropriately inserted and to read as follows:
""Furnish" (including any tense of the term used interchangeably) means any furnishing of transient accommodations, including actual furnishing, supplying, providing, facilitating, and equipping through whatever means useful in the context. To furnish includes facilitating the furnishing or facilitating the actual furnishing of transient accommodations through any means, including electronic means such as the Internet or electronic mail.
"Online transient accommodations facilitator" means any managing agent, booking agent, room seller or room reseller, or any other entity, agent, or contractee that sells, resells, reserves, or facilitates the selling or reselling of transient accommodations, or performs the services of a travel agent of any type or character online or through the Internet."
SECTION 3. Section 237-18, Hawaii Revised Statutes, is amended by amending subsection (g) to read as follows:
"(g) Where transient accommodations are
furnished through arrangements made by a travel agency [
packager, or online transient accommodations facilitator at
noncommissioned negotiated contract rates and the gross income is divided
between the operator of transient accommodations on the one hand and the travel
agency, [ or] tour packager, or online transient accommodations
facilitator on the other hand, the tax imposed by this chapter shall apply
to each such person with respect to such person's respective portion of the
proceeds, and no more.
As used in this subsection, the words [
accommodations" and "operator"] "transient
accommodations," "operator," and "online transient
accommodations facilitator" shall be defined in the same manner as
they are defined in section 237D-1."
SECTION 4. Section 237D-2, Hawaii Revised Statutes, is amended to read as follows:
"§237D-2 Imposition and rates. (a) There is levied and shall be assessed and collected each month a tax of:
(1) Five per cent for the period beginning on January 1, 1987, to June 30, 1994;
(2) Six per cent for the period beginning July 1, 1994, to December 31, 1998; and
(3) 7.25 per cent for the period beginning on January 1, 1999, and thereafter;
on the gross rental or gross rental proceeds derived from furnishing transient accommodations.
(b) Every operator shall pay to the State the tax imposed by subsection (a) as provided in this chapter.
(c) There is levied and shall be assessed and collected each month on the occupant of a resort time share vacation unit, a transient accommodations tax of 7.25 per cent on the fair market rental value.
(d) Every plan manager shall be liable for and shall pay to the State the transient accommodations tax imposed by subsection (c) as provided in this chapter. Every resort time share vacation plan shall be represented by a plan manager who shall be subject to this chapter.
(e) There is levied and shall be assessed and collected monthly from any online transient accommodations facilitator a transient accommodations tax of 7.25 per cent of the gross rental or gross rental proceeds derived from furnishing transient accommodations; provided that where transient accommodations are furnished through arrangements made by an online transient accommodations facilitator and the gross rental or gross rental proceeds are divided between the operator of transient accommodations on the one hand and the online transient accommodations facilitator on the other hand, the tax imposed under this section shall only apply with respect to the online transient accommodations facilitator's respective portion of the proceeds, and no more.
Notwithstanding the requirement that an online transient accommodations facilitator levy, assess, and remit taxes under this section monthly, if an online transient accommodations facilitator is taxable in this state by reason of section 231‑ , the online transient accommodations facilitator may petition the director to allow the levy, assessment, and remitting of taxes on a basis other than monthly, for good cause.
For purposes of this subsection, the term "good cause" includes any basis necessary to comply with the Constitution of the United States or the Hawaii Constitution."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on July 1, 2112, and shall apply retroactively to taxable years beginning after December 31, 2008.