Bill Text: HI HB1873 | 2014 | Regular Session | Introduced

Hawaii House Bill 1873 (Prior Session Legislation)

Introduced

Bill Title: Use Tax; Increase; Agribusiness Development Corporation; Acquisition and Management of Agricultural Lands ($)

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Introduced - Dead) 2014-01-21 - Referred to AGR, FIN, referral sheet 3 [HB1873 Detail]

Download: Hawaii-2014-HB1873-Introduced.html

HOUSE OF REPRESENTATIVES	H.B. NO.	1873
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII

A BILL FOR AN ACT

relating to state finances.

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

PART I

SECTION 1. Section 238-2, Hawaii Revised Statutes, is amended to read as follows:

"§238-2 Imposition of tax on tangible personal property; exemptions. There is hereby levied an excise tax on the use in this State of tangible personal property which is imported by a taxpayer in this State whether owned, purchased from an unlicensed seller, or however acquired for use in this State. The tax imposed by this chapter shall accrue when the property is acquired by the importer or purchaser and becomes subject to the taxing jurisdiction of the State. The rates of the tax hereby imposed and the exemptions thereof are as follows:

(1) If the importer or purchaser is licensed under chapter 237 and is:

(A) A wholesaler or jobber importing or purchasing for purposes of sale or resale; or

(B) A manufacturer importing or purchasing material or commodities which are to be incorporated by the manufacturer into a finished or saleable product (including the container or package in which the product is contained) wherein it will remain in such form as to be perceptible to the senses, and which finished or saleable product is to be sold in such manner as to result in a further tax on the activity of the manufacturer as the manufacturer or as a wholesaler, and not as a retailer,

there shall be no tax; provided that if the wholesaler, jobber, or manufacturer is also engaged in business as a retailer (so classed under chapter 237), paragraph (2) shall apply to the wholesaler, jobber, or manufacturer, but the director of taxation shall refund to the wholesaler, jobber, or manufacturer, in the manner provided under section 231-23(c) such amount of tax as the wholesaler, jobber, or manufacturer shall, to the satisfaction of the director, establish to have been paid by the wholesaler, jobber, or manufacturer to the director with respect to property which has been used by the wholesaler, jobber, or manufacturer for the purposes stated in this paragraph;

(2) If the importer or purchaser is licensed under chapter 237 and is:

(A) A retailer or other person importing or purchasing for purposes of sale or resale, not exempted by paragraph (1);

(B) A manufacturer importing or purchasing material or commodities which are to be incorporated by the manufacturer into a finished or saleable product (including the container or package in which the product is contained) wherein it will remain in such form as to be perceptible to the senses, and which finished or saleable product is to be sold at retail in this State, in such manner as to result in a further tax on the activity of the manufacturer in selling such products at retail;

(C) A contractor importing or purchasing material or commodities which are to be incorporated by the contractor into the finished work or project required by the contract and which will remain in such finished work or project in such form as to be perceptible to the senses;

(D) A person engaged in a service business or calling as defined in section 237-7, or a person furnishing transient accommodations subject to the tax imposed by section 237D-2, in which the import or purchase of tangible personal property would have qualified as a sale at wholesale as defined in section 237-4(a)(8) had the seller of the property been subject to the tax in chapter 237; or

(E) A publisher of magazines or similar printed materials containing advertisements, when the publisher is under contract with the advertisers to distribute a minimum number of magazines or similar printed materials to the public or defined segment of the public, whether or not there is a charge to the persons who actually receive the magazines or similar printed materials,

the tax shall be [~~one-half of one~~] two per cent of the purchase price of the property, if the purchase and sale are consummated in Hawaii; or, if there is no purchase price applicable thereto, or if the purchase or sale is consummated outside of Hawaii, then [~~one-half of one~~] two per cent of the value of such property; and

(3) In all other cases, four per cent of the value of the property.

For purposes of this section, tangible personal property is property that is imported by the taxpayer for use in this State, notwithstanding the fact that title to the property, or the risk of loss to the property, passes to the purchaser of the property at a location outside this State. Where plaintiff: (1) caused consumer electronic goods from various mainland vendors to be shipped to Hawaii in order to restock plaintiff's retail stores in this State, constituting importation of goods into the State for purposes of resale; and (2) used the goods in Hawaii by "keeping the property" in this State "for sale", plaintiff was subject to assessment of the use tax under this section. 128 H. 116, 284 P.3d 209 (2012)."

SECTION 2. Section 238-2.3, Hawaii Revised Statutes, is amended to read as follows:

"§238-2.3 Imposition of tax on imported services or contracting; exemptions. There is hereby levied an excise tax on the value of services or contracting as defined in section 237-6 that are performed by an unlicensed seller at a point outside the State and imported or purchased for use in this State. The tax imposed by this chapter shall accrue when the service or contracting as defined in section 237-6 is received by the importer or purchaser and becomes subject to the taxing jurisdiction of the State. The rates of the tax hereby imposed and the exemptions from the tax are as follows:

(1) If the importer or purchaser is licensed under chapter 237 and is:

(A) Engaged in a service business or calling in which the imported or purchased services or contracting become identifiable elements, excluding overhead, of the services rendered by the importer or purchaser, and the gross income of the importer or purchaser is subject to the tax imposed under chapter 237 on services at the rate of one-half of one per cent or the rate of tax imposed under section 237-13.3;

(B) A manufacturer importing or purchasing services or contracting that become identifiable elements, excluding overhead, of a finished or saleable product (including the container or package in which the product is contained) and the finished or saleable product is to be sold in a manner that results in a further tax on the manufacturer as a wholesaler, and not a retailer; or

(C) A contractor importing or purchasing contracting that become identifiable elements, excluding overhead, of the finished work or project required under the contract; provided that:

(i) The gross proceeds derived by the contractor are subject to the tax under section 237-13(3) as a contractor; and

(ii) The contractor could have deducted amounts paid to the subcontractor under section 237-13(3)(B) if the subcontractor was subject to general excise tax under chapter 237;

there shall be no tax imposed on the value of the imported or purchased services or contracting; provided that if the manufacturer is also engaged in business as a retailer as classified under chapter 237, paragraph (2) shall apply to the manufacturer, but the director of taxation shall refund to the manufacturer, in the manner provided under section 231-23(c), that amount of tax that the manufacturer, to the satisfaction of the director, shall establish to have been paid by the manufacturer to the director with respect to services that have been used by the manufacturer for the purposes stated in this paragraph.

(2) If the importer or purchaser is a person licensed under chapter 237 and is:

(A) Engaged in a service business or calling in which the imported or purchased services or contracting become identifiable elements, excluding overhead, of the services rendered by the importer or purchaser, and the gross income from those services when sold by the importer or purchaser is subject to the tax imposed under chapter 237 at the highest rate;

(B) A manufacturer importing or purchasing services or contracting that become identifiable elements, excluding overhead, of the finished or saleable manufactured product (including the container or package in which the product is contained) and the finished or saleable product is to be sold in a manner that results in a further tax under chapter 237 on the activity of the manufacturer as a retailer; or

(C) A contractor importing or purchasing services that become identifiable elements, excluding overhead, of the finished work or project required, under the contract, and where the gross proceeds derived by the contractor are subject to the tax under section 237-13(3) as a contractor,

the tax shall be [~~one-half of one~~] two per cent of the value of the imported or purchased services or contracting; and

(3) In all other cases, the importer or purchaser is subject to the tax at the rate of four per cent on the value of the imported or purchased services or contracting."

SECTION 3. Section 238-2.6, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

"(c) No county surcharge on state tax shall be established upon any use taxable under this chapter at the [~~one-half~~] two per cent tax rate or upon any use that is not subject to taxation or that is exempt from taxation under this chapter."

SECTION 4. Section 238-14, Hawaii Revised Statutes, is amended to read as follows:

"§238-14 Taxes state realizations. (a) All taxes collected under this chapter shall be state realizations.

(b) Beginning on July 1, 2014, the additional revenues generated and collected from the increase in use tax rates imposed by sections 1, 2, and 3 of Act , Session Laws of Hawaii 2014, shall be deposited into the acquisition and management of agricultural lands special fund established under section 163D- ."

PART II

SECTION 5. Chapter 163D, Hawaii Revised Statutes, is amended by adding a new section to part II to be appropriately designated and to read as follows:

"§163D- Acquisition and management of agricultural lands special fund. (a) There is established in the state treasury the acquisition and management of agricultural lands special fund, into which shall be deposited use tax revenues as provided by section 238-14(b).

(b) The corporation may expend moneys from the fund for the following purposes:

(1) Acquisition of agricultural lands pursuant to section 163D-31; or

(2) Payment for financial management services for agricultural lands, as provided under section 163D-31(d).

SECTION 6. Section 163D-31, Hawaii Revised Statutes, is amended to read as follows:

"[[]§163D-31[]] Acquisitions of important agricultural lands authorized by the legislature. (a) The legislature may authorize the corporation to acquire agricultural lands for the protection of agricultural lands, public land banking, or the promotion of farm ownership and diversified agriculture.

(b) The acquisition shall be authorized by a bill enacted into law and shall contain:

(1) A statement of the value of the interest in land as a resource to the State;

(2) A description of the specific parcel of land or agricultural easement proposed to be acquired;

(3) The name of the owner of the property; and

(4) The estimated costs of acquiring the interest in the land.

(c) The landowner shall receive payment for the interest in the land in a lump sum, through an installment purchase agreement as determined pursuant to section 163D-32, or from revenues derived from the issuance of revenue bonds pursuant to section 163D-9.

(d) Notwithstanding any provision of this chapter to the contrary, the corporation may contract with a financial institution chartered under chapter 412 or a federal financial institution, as defined under section 412:1-109, that transacts business in this State to provide financial management services for agricultural lands acquired under this section. For the purposes of this subsection, "financial management services" includes the collection of lease rent and any other moneys owed to the corporation related to the lease of agricultural land under the corporation's control."

SECTION 7. Section 163D-32, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

"(b) The corporation may make payments from moneys [~~appropriated~~]:

(1) Appropriated by the legislature[.]; or

(2) From the acquisition and management of agricultural lands special fund."

PART III

SECTION 8. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 9. This Act shall take effect on July 1, 2014; provided that part I shall be repealed on June 30, 2016, and sections 238-2, 238-2.3, 238-2.6(c), and 238-14, Hawaii Revised Statutes, shall be reenacted in the form in which they read on the day before the effective date of this Act.

INTRODUCED BY:	_____________________________

Report Title:

Use Tax; Increase; Agribusiness Development Corporation; Acquisition and Management of Agricultural Lands

Description:

Increases the use tax by 1.5% for a 2-year period to provide a dedicated funding source for the acquisition and management of agricultural lands.

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