Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 237 - GENERAL EXCISE TAX LAW › Subchapter 1 - DEFINITIONS; ADMINISTRATION › Section 18-237-4 - "Wholesaler", "jobber", defined

Current through June, 2024
(a) Sales at
				wholesale defined. Pursuant to section
				237-4,
				HRS, and taking into consideration sections
				237-13(3)(C)
				and
				237-13(3)(D),
				HRS, only the following are sales at wholesale:
(1) Sales to a licensed retail merchant,
				jobber or other licensed seller for purposes of resale;
(2) Sales to a licensed manufacturer of
				materials or commodities which are to be incorporated by such manufacturer into
				a finished or saleable product (including the container or package in which the
				product is contained) during the course of its preservation, manufacture or
				processing, including preparation for market, and which will remain in such
				finished or saleable product in such form as to be perceptible to the senses,
				which finished or saleable product is to be sold and not otherwise used by such
				manufacturer;
(3) Sales to a
				licensed agricultural or aquacultural producer or agricultural or aquacultural
				cooperative association of materials or commodities which are to be
				incorporated, used, or applied by the producer or by the cooperative
				association for the purpose of producing or raising a finished or saleable
				product or crop which is to be sold and not otherwise used by the producer or
				cooperative association, including specifically materials or commodities
				incorporated, used, or applied as essential to the planting, growth, nurturing,
				and production of agricultural or aquacultural products or crops which are sold
				by the producer or by the cooperative association;
(4) Sales to a licensed contractor of
				materials 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
				the finished work or project in a form which is perceptible to the senses,
				unless governed by the election provided for by section
				237-13(3)(C),
				HRS; and sales to a purchaser holding a license under the general excise tax
				law, of materials or commodities which are to be incorporated by the purchaser
				into a building, structure or other improvements on land held by the purchaser
				and which will remain in such improvement in a form which is perceptible to the
				senses, provided that the improvements are made with the intention of selling
				or otherwise disposing of them and that the property is afterward sold or
				otherwise disposed of in such manner as to render the purchaser of the
				materials or commodities, so incorporated, liable to the same tax as if engaged
				in the business of contracting;
(5)
				Sales to a licensed producer, or to a cooperative association described in
				section
				237-23(9),
				HRS, for sale to such producer, or to a licensed person operating a feed lot,
				of:
(A) Poultry or animal feed, hatching
				eggs, semen, replacement stock, breeding services for the purpose of raising or
				producing animal or poultry products for disposition as described in section
				237-5,
				HRS, or to be incorporated in a manufactured product as described in paragraph
				(2), or for the purpose of breeding, hatching, milking, or egg laying other
				than for the customer's own consumption of the meat, poultry, eggs, or milk so
				produced;
(B) In the case of a feed
				lot operator:
(i) Only the segregated cost of
				the feed furnished by the feed lot operator as part of his services to a
				licensed producer of poultry or animals to be butchered, or to a cooperative
				association described in section
				237-23(1),
				HRS, of such licensed producers shall be deemed to be a sale at wholesale;
				and
(ii) Any amount derived from
				the furnishing of feed lot services, other than the segregated cost of feed,
				shall be deemed taxable at the service business rate.
(C) This paragraph shall not apply to the
				sale of feed for poultry or animals to be used for hauling, transportation, or
				sports purposes;
(6)
				Sales to a licensed producer, or to a cooperative association described in
				section
				237-23(9),
				HRS, for sale to such producer, of:
(A) Seed
				for producing agricultural products to be sold or otherwise disposed of as
				described in section
				237-5,
				HRS, or to be incorporated in a manufactured product as described in paragraph
				(2); or
(B) Bait for catching fish
				(including the catching of bait for catching fish) which are to be sold or
				otherwise disposed of as described in section
				237-5,
				HRS, or to be incorporated in a manufactured product as described in paragraph
				(2);
(7) Sales to a
				licensed producer or to a cooperative association described in section
				237-23(9),
				HRS, for sale to the producer, of:
(A) Cartons
				and other containers, wrappers and sacks, and binders to be used for packaging
				eggs, vegetables, fruits and other agricultural products; or
(B) Seedlings and cuttings for producing
				nursery plants; or
(C) Chick
				containers; which are to be used as described in section
				237-5,
				HRS, or to be incorporated in a manufactured product as described in paragraph
				(2);
(8) Sales of
				tangible personal property to a licensed person engaged in the service
				business, provided that:
(A) The property is
				not consumed or incidental to the performance of service; and
(B) There is a sale of the article at the
				retail rate of four percent; and
(C) The resale of the article is separately
				charged or billed by the person rendering the service; and
(9) Sales to a licensed leasing company which
				leases capital goods as a service to others. For this purpose, capital goods
				are goods which in the hands of a licensed leasing company has a depreciable
				life and which are to be used by the licensed leasing company for leasing to
				others for a consideration.
The words "cooperative association" as used in paragraphs
				  (5) to (7) mean a cooperative association incorporated under chapter 421 or
				  under chapter
				  422, HRS, and which fully meet the
				  requirements for tax exemption as specified in section
				  237-23(9),
				  HRS.
The words "agricultural producer" as used in paragraph (3)
				  and section
				  237-5,
				  HRS, mean a producer of plant crops, including floriculture, horticulture,
				  viticulture (vineyards), timber, nut, coffee, sugar cane, pineapple, or other
				  similar agricultural activity where the products or crops are sold, but shall
				  not include any animal or poultry products or a person operating a golf course,
				  a cemetery, a property management activity, or an agricultural research
				  organization.
The words "aquaculture producer" as used in paragraph (3)
				  and section
				  237-5,
				  HRS, mean a producer of aquatic plant and animal life for food or fiber within
				  a controlled salt, brackish, or freshwater environment.