Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 237 - GENERAL EXCISE TAX LAW › Subchapter 2 - LICENSES; TAX; EXEMPTIONS › Section 18-237-13-06.16 - Tax on service business; telecommunication services

Current through June, 2024
(a) Scope. This section is intended to
				provide uniform rules of administrative procedure to govern the taxation of the
				telecommunication industry pursuant to section 237-13(6), HRS, of the general
				excise tax law. This section shall not apply to gross income that is taxable
				under chapter 239, HRS, the public service company tax law.
(b) Definitions. As used in this section,
				unless the context otherwise requires:
"Directly related to Hawaii" means geographically located
				  within Hawaii or allocated to Hawaii according to generally accepted accounting
				  principles and practices.
"Foreign common carrier" means any person operating under
				  the legal jurisdiction of a country other than the United States which provides
				  telecommunication service to the public in general or to specified classes of
				  the public.
"Gross income" means the gross receipts, as defined in
				  section 237-3, HRS, of a long distance carrier.
"Hawaii billed income" means the gross income received or
				  accrued by a long distance carrier from telecommunication service which is
				  originated or terminated in this State and is charged to a telephone number,
				  customer, or account in this State.
"Interexchange carrier" means any person which provides
				  telecommunication service between local access transport areas.
"Interstate telecommunications" means all telecommunications
				  that either originate or terminate outside of this State.
"Intrastate telecommunications" means all telecommunications
				  that originate and terminate within this State.
"Local access transport area" means any local intrastate
				  calling area.
"Long distance carrier" means any interexchange carrier,
				  reseller, or foreign common carrier which purchases, installs, rents, or leases
				  a telephone system, telecommunication system, or telecommunications service for
				  the interexchange carrier, reseller, or foreign common carrier's own use to
				  provide the interexchange carrier, reseller, or foreign common carrier or other
				  persons with telephonic interstate or international telecommunication service
				  which is wholly or partially independent of any local exchange system or any
				  intrastate or interstate interexchange network or which is a substitute for any
				  dedicated facility by which an interexchange or foreign common carrier provides
				  a telephonic communication path in the State.
"Reseller" means any person which provides telecommunication
				  service through the use of facilities or services owned or provided by another
				  telecommunication service provider.
"Telecommunication service" means the transmission,
				  conveyance, routing, or reception of any electronic, electromagnetic
				  interactive transmission, or any other kind of energy force variations of
				  information in any form, including but not limited to voice, image, data, or
				  printed copy signal by means of wires, cables, radio waves, laser microwaves,
				  satellites, fiber optics, any combination of these media, or any other method
				  now in existence or that may be devised.
(c) Application.
(1) This section shall apply to all long
				distance carriers conducting business, by providing telecommunication service,
				in the State.
(2) The income of a
				long distance carrier that is subject to tax is that portion of gross income
				received by any long distance carrier from telecommunication service which is
				originated or terminated in this State and is charged to a telephone number,
				customer, or account in this State.
(3) Apportionment. Under the Constitution and
				laws of the United States, the entire gross income as determined in paragraph
				(2) cannot be included in the measure of tax; such gross income shall be
				apportioned by using the apportionment formula in subsection (e)(1).