Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 235 - INCOME TAX LAW › Subchapter 2 - DIVISION OF INCOME FOR TAX PURPOSES › Section 18-235-38-06.04 - Television and radio broadcasting

Current through June, 2024
(a) When a person
				in the business of broadcasting film or radio programming, whether through the
				public airwaves, by cable, direct or indirect satellite transmission, or any
				other means of communication, either through a network (including owned and
				affiliated stations) or through an affiliated, unaffiliated, or independent
				television or radio broadcasting station, has income from sources both within
				and without Hawaii, the amount of business income from sources within Hawaii
				shall be determined pursuant to sections
				235-21 to
				235-39, HRS, or
				the Multistate Tax Compact (section
				255-1, HRS),
				except as modified by this section.
(b) For definitions, rules, and examples for
				determining whether income shall be classified as business or nonbusiness
				income, see sections 18-235-21-01 to 18-235-21-04.
(c) In this section, unless the context
				clearly requires otherwise:
"Film" or "film programming" means any and all performances,
				  events, or productions telecast on television, including news, sporting events,
				  plays, stories, or other literary, commercial, educational, or artistic works,
				  through the use of video tape, disc, or any other type of format or
				  medium.
Each episode of a series of films produced for television
				  shall constitute a separate film notwithstanding that the series relates to the
				  same principal subject and is produced during one or more tax periods.
"Outer-jurisdictional property" means tangible personal
				  property, such as orbiting satellites, undersea transmission cables, and the
				  like, that are owned or rented by the taxpayer and used in the business of
				  telecasting or broadcasting, but that are not physically located in any
				  particular state.
"Radio" or "radio programming" means any and all
				  performances, events, or productions that are broadcast on radio, including
				  news, sporting events, plays, stories, or other literary, commercial,
				  educational, or artistic works, through the use of an audio tape, disc, or any
				  other format or medium.
Each episode of a series of radio programming produced for
				  radio broadcast shall constitute a separate radio programming notwithstanding
				  that the series relates to the same principal subject and is produced during
				  one or more tax periods.
"Release" or "in release" means the placing of film or radio
				  programming into service. A film or radio program is placed into service when
				  it is first broadcast to the primary audience for which the program was
				  created. Thus, for example, a film is placed in service when it is first
				  publicly telecast for entertainment, educational, commercial, artistic, or
				  other purposes. Each episode of a television or radio series is placed in
				  service when it is first broadcast. A program is not placed in service merely
				  because it is completed and therefore is in a condition or state of readiness
				  and availability for broadcast, or merely because it is previewed to
				  prospective sponsors or purchasers.
"Rent" includes license fees or other payments or
				  consideration provided in exchange for the broadcast or other use of film or
				  radio programming.
"State" includes the District of Columbia, the Commonwealth
				  of Puerto Rico, or any possession or territory of the United States.
A "subscriber" to a cable television system is the
				  individual residence or other outlet which is the ultimate recipient of the
				  transmission.
"Telecast" or "broadcast" (sometimes used interchangeably
				  with respect to television) means the transmission of television or radio
				  programming, respectively, by an electronic or other signal conducted by radio
				  waves, microwaves, wires, lines, coaxial cables, wave guides, fiber optics,
				  satellite transmissions, or by any other means, directly or indirectly to
				  viewers or listeners.
(d)
				The property factor shall be determined in accordance with sections
				235-30
				to
				235-32,
				HRS, and the rules thereunder; the payroll factor in accordance with sections
				235-33
				to
				235-34,
				HRS, and the rules thereunder; and the sales factor in accordance with sections
				235-35
				to
				235-37,
				HRS, and the rules thereunder; except as modified by this section.
(e) The following rules relate to the
				property factor.
(1) The following rules apply
				with respect to the property factor in general.
(A) In the case of rented studios, the net
				annual rental rate shall include only the amount of the basic or flat rental
				charge by the studio for the use of a stage or other permanent equipment such
				as sound recording equipment and the like; except that additional equipment
				rented from other sources or from the studio not covered in the basic or flat
				rental charge and used for one week or longer (even though rented on a
				day-to-day basis) shall be included. Lump-sum net rental payments for a period
				which encompasses more than a single income year shall be assigned ratably over
				the rental period.
(B) No value or
				cost attributable to any outer-jurisdictional and film or radio programming
				property shall be included in the property factor.