Bill Text: HI HB1655 | 2018 | Regular Session | Amended

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Bill Title: Relating To Tax On Sales Of Tangible Personal Property.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Engrossed - Dead) 2018-04-20 - Conference Committee Meeting will reconvene on Wednesday 04-25-18 2:00PM in conference room 309. [HB1655 Detail]

Download: Hawaii-2018-HB1655-Amended.html

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HOUSE OF REPRESENTATIVES	H.B. NO.	1655
TWENTY-NINTH LEGISLATURE, 2018		S.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO TAX ON SALES OF TANGIBLE PERSONAL PROPERTY.

 

 

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

 

     SECTION 1.  Chapter 237, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:

     "§237-     Sale of tangible personal property; marketplace facilitators; other forum providers.  (a)  A marketplace facilitator who sells or assists in the sale of tangible personal property shall be deemed the seller of the property and the seller on whose behalf the sale is made shall be deemed to be making a sale at wholesale pursuant to section 237-4.

     (b)  Any person, other than a marketplace facilitator, who provides a forum, whether physical or electronic, in which sellers list or advertise tangible personal property for sale and takes or processes sales orders shall:

     (1)  Post a conspicuous notice on its forum that informs purchasers intending to purchase tangible personal property for delivery to a location in this State that the purchaser is required to pay use tax if the sale is made from an unlicensed seller;

     (2)  Provide the following:

          (A)  A written notice to each purchaser at the time of each sale of tangible personal property for delivery to a location in this State that the purchaser may be required to remit use tax directly to the department; and

          (B)  Instructions for obtaining additional information from the department on whether and how to remit use tax to the department; and

     (3)  No later than the twentieth day of the fourth month following the close of the taxable year, submit a report to the department that includes, with respect to each purchaser of tangible personal property delivered to a location in this State, all of the following:

          (A)  The purchaser's name, billing address, and mailing address;

          (B)  The address in this State to which the property was delivered to the purchaser;

          (C)  The aggregate dollar amount of the purchaser's purchases from the seller; and

          (D)  The name and address of the seller that made the sale to the purchaser;

provided that the person, in lieu of complying with the notice and reporting requirements in this subsection, may elect to be deemed the seller of the tangible personal property, as provided in subsection (a).

     (c)  If a person who is subject to subsection (b) fails to comply with any of its requirements and has not elected to be deemed the seller of the subject tangible personal property, unless it is shown that the failure is due to reasonable cause and not due to neglect, there shall be assessed a penalty of $1,000 if the failure is for not more than one month, with an additional $1,000 for each additional month or fraction thereof during which the failure continues, not exceeding $12,000 in the aggregate.

     §237-     Referrers.  (a) A referrer shall:

     (1)  Post a conspicuous notice in each of its listings and advertisements that informs purchasers intending to purchase tangible personal property for delivery to a location in this State that the purchaser is required to pay use tax if the sale is made from an unlicensed seller;

     (2)  Provide the following:

          (A)  A written notice to each unlicensed seller on whose behalf the referrer lists or advertises tangible personal property for sale that the purchaser may be required to remit use tax directly to the department for tangible personal property delivered to a location in this State; and

          (B)  Instructions for obtaining additional information from the department on whether and how to remit use tax to the department; and

     (3)  No later than the twentieth day of the fourth month following the close of the taxable year, provide the department with:

          (A)  A list of all unlicensed sellers on whose behalf the referrer lists or advertises tangible personal property for sale and delivery to a location within the State; provided that the listing or advertisement states that the seller does not collect or pay the tax due under chapter 237, in a form that the department shall prescribe; and

          (B)  An affidavit signed under penalty of perjury by the referrer or, if the referrer is a business entity, by an officer of the referrer affirming that the referrer made reasonable efforts to comply with the notice and reporting requirements in this subsection.

     (b) Any referrer who fails to comply with subsection (a), unless it is shown that the failure is due to reasonable cause and not due to neglect, shall be assessed a penalty of $1,000 if the failure is for not more than one month, with an additional $1,000 for each additional month or fraction thereof during which the failure continues, not exceeding $12,000 in the aggregate."

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

     1.  By adding two new definitions to be appropriately inserted and to read:

     ""Marketplace facilitator" means any person who sells or assists in the sale of tangible personal property on behalf of another seller by:

     (1)  Providing a forum, whether physical or electronic, in which sellers list or advertise tangible personal property for sale; and

     (2)  Collecting payment from the purchaser and transmitting the payment, in full or in part, to the person on whose behalf the sale is made.

     "Referrer" means any person who:

     (1)  Contracts or otherwise enters into an agreement with a seller to list or advertise the seller's tangible personal property for sale in any medium, including an internet website or catalog; provided that the listing or advertisement states whether the seller collects or pays the tax due under chapter 237;

     (2)  Receives a commission, fee, or other consideration from the seller for the listing or advertisement;

     (3)  Transfers, via telephone, internet link, or other means, a potential purchaser to the seller or an affiliated person; and

     (4)  Does not take or process sales orders for the seller or collect payment from the purchaser for the transaction."

     2.  By amending the definition of "representative" to read:

     ""Representative" means any salesperson, commission agent, manufacturer's representative, broker or other person who is authorized or employed by [an unlicensed] a seller to assist such seller in selling property for use in the State, by procuring orders for such sales or otherwise, and who carries on such activities in the State, it being immaterial whether such activities are regular or intermittent[; but the].  The term "representative" does not include [a]:

     (1)  A manufacturer's representative whose functions are wholly promotional and to act as liaison between an unlicensed seller and a seller or sellers, and which do not include the procuring, soliciting or accepting of orders for property or the making of deliveries of property, or the collecting of payment for deliveries of property, or the keeping of books of account concerning property orders, deliveries or collections transpiring between an unlicensed seller and a seller or sellers[.  Any unlicensed seller who in person carries on any such activity in the State shall also be classed as a representative.]; or

     (2)  A marketplace facilitator."

     SECTION 3.  Section 238-1, Hawaii Revised Statutes, is amended as follows:

     1.  By adding a new definition to be appropriately inserted and to read:

     ""Marketplace facilitator" has the same meaning as defined in section 237-1."

     2.  By amending the definition of "import" to read:

     ""Import" (or any nounal, verbal, adverbial, adjective, or other equivalent of the term) includes:

     (1)  The importation into the State of tangible property, services, or contracting owned, purchased from an unlicensed seller, or however acquired, from any other part of the United States or its possessions or from any foreign country, whether in interstate or foreign commerce, or both; [and]

     (2)  The sale and delivery of tangible personal property owned, purchased from an unlicensed seller, or however acquired, by a seller who is or should be licensed under the general excise tax law from an out-of-state location to an in-state purchaser, regardless of the free on board point or the place where title to the property transfers to the purchaser[.]; and

     (3)  The sale of tangible personal property by a marketplace facilitator on behalf of an unlicensed seller for delivery to a purchaser in the State."

     SECTION 4.  If any provision of this Act, or the application thereof to any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of the Act that can be given effect without the invalid provision or application, and to this end the provisions of this Act are severable.

     SECTION 5.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 6.  This Act shall take effect upon its approval.

 

Report Title:

General Excise Tax; Use Tax; Tangible Personal Property; Marketplace Facilitator; Referrer

 

Description:

Clarifies that a person or company who meets the qualifications of being a marketplace facilitator is the seller of tangible personal property for general excise tax and use tax purposes.  Defines "marketplace facilitator" and "referrer".  Establishes reporting requirements and penalties for marketplace facilitators and referrers.  (SD1)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.