Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 237 - GENERAL EXCISE TAX LAW › Subchapter 2 - LICENSES; TAX; EXEMPTIONS › Section 18-237-29.53-05 - Services related to tangible personal property

Current through June, 2024
Services related to tangible personal property are used or
				  consumed where the tangible personal property is delivered after the services
				  are performed Services related to tangible personal property include, but are
				  not limited to, inspection, appraisal, testing, and repair of tangible personal
				  property Services related to tangible personal property do not include services
				  performed by commissioned agents
Example 1:
Tom Tourist, a resident of Montana
				  vacationing in Hawaii, takes his broken mobile phone to Fixer LLC, an
				  electronic repair shop in Hawaii. After Fixer LLC repairs the mobile phone, Tom
				  Tourist picks it up from Fixer LLC's shop in Hawaii. All of the value or gross
				  income that Fixer LLC receives is not exempt under section
				  237-29.53,
				  HRS, because Fixer LLC's service is used or consumed in Hawaii, where the
				  property was delivered after the service was performed.
Example 2:
Assume the same facts as in Example
				  1, except that Fixer LLC, upon Tom Tourist's request, ships the mobile phone to
				  Tom Tourist's home in Montana after completing the repair. All of the value or
				  gross income that Fixer LLC receives is exempt under section
				  237-29.53,
				  HRS, because Fixer LLC's service is used or consumed in Montana, where the
				  property was delivered after the service was performed.
Example 3:
Assume the same facts as in Example
				  1, except that Fixer LLC is unable to repair Tom Tourist's mobile phone at its
				  shop in Hawaii. Fixer LLC sends the phone to its warehouse in Arizona, where
				  the repair is completed. The mobile phone is shipped back to Fixer LLC's shop
				  in Hawaii, where Tom Tourist picks it up. All of the value or gross income that
				  Fixer LLC receives is not exempt under section
				  237-29.53,
				  HRS, because Fixer LLC's service is used or consumed in Hawaii, where the
				  property was delivered after the service was performed.
Example 4:
Derrick Driver, a resident of Hawaii,
				  calls Aloha Auto Finder, LLC, a car broker located in Hawaii, and hires it to
				  find and negotiate a purchase price for a green classic car. Derrick Driver
				  provides Aloha Auto Finder, LLC with a list of specifications that the car must
				  have and the total amount he is willing to pay for the car. Derrick Driver and
				  Aloha Auto Finder, LLC agree that Aloha Auto Finder, LLC will be paid a flat
				  fee of $500. Aloha Auto Finder, LLC finds a green classic car in Michigan and
				  negotiates a purchase price on behalf of Derrick Driver. Derrick Driver
				  purchases the car and instructs the seller to ship the car from Michigan to
				  Derrick Driver's second home in Rhode Island. Section 237-29.53-05 does not
				  apply because Aloha Auto Finder, LLC is a commissioned agent. Instead, section
				  237-29.53-10 applies. Under that rule, all of the value or gross income that
				  Aloha Auto Finder, LLC receives is not exempt under section
				  237-29.53,
				  HRS, because Aloha Auto Finder, LLC's services are used or consumed in Hawaii,
				  where Aloha Auto Finder, LLC is located.