Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 241 - TAXATION OF BANKS AND OTHER FINANCIAL CORPORATIONS › Section 18-241-4-02 - Definitions

Current through June, 2024
As used in sections
				18-241-4-01 to
				18-241-4-05, unless the context
				otherwise requires:
"Billing address" means the location indicated in the books
				and records of the taxpayer on the first day of the taxable year (or on such
				later date in the taxable year when the customer relationship began) as the
				address where any notice, statement, or bill relating to a customer's account
				is mailed.
"Borrower or credit card holder located in this state"
				means:
(1) A borrower, other than a credit card holder, that is
				engaged in a trade or business which maintains its commercial domicile in this
				State; or
(2) A borrower that is not engaged in a trade or business or a
				credit card holder whose billing address is in this State.
"Commercial domicile" means:
(1) The headquarters of the trade or business, that is, the
				place from which the trade or business is principally managed and directed;
				or
(2) If a taxpayer is organized under the laws of a foreign
				country, or the Commonwealth of Puerto Rico, or any territory or possession of
				the United States, the taxpayer's commercial domicile shall be deemed for the
				purposes of sections
				18-241-4-01 to
				18-241-4-05 to be the state of the
				United States or the District of Columbia from which the taxpayer's trade or
				business in the United States is principally managed and directed. It shall be
				presumed, subject to rebuttal, that the location from which the taxpayer's
				trade or business is principally managed and directed is the state of the
				United States or the District of Columbia to which the greatest number of
				employees are regularly connected or out of which they are working,
				irrespective of where the services of such employees are performed, as of the
				last day of the taxable year.
"Compensation" means wages, salaries, commissions, and any
				other form of remuneration paid to employees for personal services that are
				included in such employee's gross income under the Internal Revenue Code. In
				the case of employees not subject to the Internal Revenue Code, e.g., those
				employed in foreign countries, the determination of whether such payments would
				constitute gross income to such employees under the Internal Revenue Code shall
				be made as though such employees were subject to the Internal Revenue
				Code.
"Credit card" means credit, travel, or entertainment
				card.
"Credit card issuer's reimbursement fee" means the fee a
				taxpayer receives from a merchant's bank because one of the persons to whom the
				taxpayer has issued a credit card has charged merchandise or services to the
				credit card.
"Employee" means, with respect to a particular taxpayer, any
				individual who, under the usual common-law rules applicable in determining the
				employer-employee relationship, has the status of an employee of that
				taxpayer.
"Financial institution" means a person subject to the tax
				imposed by chapter
				241, HRS.
"Gross rents" means the actual sum of money or other
				consideration payable for the use or possession of property.
(1) Gross rents include:
(A) Any amount payable for the use or possession of real
				property or tangible property whether designated as a fixed sum of money or as
				a percentage of receipts, profits, or otherwise;
(B) Any amount payable as additional rent or in lieu of rent,
				such as interest, taxes, insurance, repairs, or any other amount required to be
				paid by the terms of a lease or other arrangement; and
(C) A proportionate part of the cost of any improvement to real
				property made by or on behalf of the taxpayer which reverts to the owner or
				lessor upon termination of a lease or other arrangement. The amount to be
				included in gross rents is the amount of amortization or depreciation allowed
				in computing the taxable income base for the taxable year. However, where a
				building is erected on leased land by or on behalf of the taxpayer, the value
				of the land is determined by multiplying the gross rent by eight and the value
				of the building is determined in the same manner as if owned by the
				taxpayer.
(2) Gross rents do not include:
(A) Reasonable amounts payable as separate charges for water
				and electric service furnished by the lessor;
(B) Reasonable amounts payable as service charges for
				janitorial services furnished by the lessor;
(C) Reasonable amounts payable for storage, if such amounts are
				payable for space not designated for and not under the control of the taxpayer;
				or
(D) That portion of any rental payment which is applicable to
				the space subleased from the taxpayer and not used by it.
"Internal Revenue Code" means the Internal Revenue Code of
				1986, as amended, as operative under chapter
				235, HRS.
"Loan" means any extension of credit resulting from direct
				negotiations between the taxpayer and its customer, or the purchase, in whole
				or in part, of such extension of credit from another. Loans include
				participations, syndications, and leases treated as loans for federal income
				tax purposes. Loans shall not include:
(1) Properties treated as loans under section 595 of the
				Internal Revenue Code;
(2) Futures or forward contracts;
(3) Options;
(4) Notional principal contracts such as swaps;
(5) Credit card receivables, including purchased credit card
				relationships;
(6) Non-interest bearing balances due from depository
				institutions;
(7) Cash items in the process of collection;
(8) Federal funds sold;
(9) Securities purchased under agreements to resell;
(10) Assets held in a trading account;
(11) Securities;
(12) Interests in a REMIC (as defined in section 860D of the
				Internal Revenue Code), or other mortgage-backed or asset-backed security;
				and
(13) Other similar items.
"Loan secured by real property" means that fifty percent or
				more of the aggregate value of the collateral used to secure a loan or other
				obligation, when valued at fair market value as of the time the original loan
				or obligation was incurred, was real property.
"Merchant discount" means the fee (or negotiated discount)
				charged to a merchant by the taxpayer for the privilege of participating in a
				program whereby a credit card is accepted in payment for merchandise or
				services sold to the card holder.
"Participation" means an extension of credit in which an
				undivided ownership interest is held on a pro rata basis in a single loan or
				pool of loans and related collateral. In a loan participation, the credit
				originator initially makes the loan and then subsequently resells all or a
				portion of it to other lenders. The participation may or may not be known to
				the borrower.
"Person" means an individual, estate, trust, partnership,
				corporation, and any other business entity.
"Principal base of operations" with respect to transportation
				property means the place of more or less permanent nature from which said
				property is regularly directed or controlled. With respect to an employee, the
				principal base of operations means the place of more or less permanent nature
				from which the employee regularly (1) starts his or her work and to which he or
				she customarily returns in order to receive instructions from his or her
				employer, (2) communicates with his or her customers or other persons, or (3)
				performs any other functions necessary to the exercise of his or her trade or
				profession at some other point or points.
"Real property owned" and "tangible personal property owned"
				mean real and tangible personal property, respectively, (1) on which the
				taxpayer may claim depreciation for federal income tax purposes, or (2)
				property to which the taxpayer owns legal title and on which no other person
				may claim depreciation for federal income tax purposes (or could claim
				depreciation if subject to federal income tax). Real and tangible personal
				property do not include coin, currency, or property acquired in lieu of or
				pursuant to a foreclosure.
"Regular place of business" means an office at which the
				taxpayer carries on its business in a regular and systematic manner and which
				is continuously maintained, occupied, and used by employees of the
				taxpayer.
"State" means a state of the United States, the District of
				Columbia, the Commonwealth of Puerto Rico, any territory or possession of the
				United States, or any foreign country.
"Syndication" means an extension of credit in which two or
				more persons fund and each person is at risk only up to a specified percentage
				of the total extension of credit or up to a specified dollar amount.
"Taxable" means either:
(1) That a taxpayer is subject in another state to a net income
				tax, a franchise tax measured by net income, a franchise tax for the privilege
				of doing business, a corporate stock tax (including a bank shares tax), a
				single business tax, or an earned surplus tax, or any tax which is imposed upon
				or measured by net income; or
(2) That another state has jurisdiction to subject the taxpayer
				to any of such taxes regardless of whether, in fact, the state does or does
				not.
"Transportation property" means vehicles and vessels capable
				of moving under their own power, such as aircraft, trains, water vessels, and
				motor vehicles, as well as any equipment or containers attached to such
				property, such as rolling stock, barges, trailers, or the
				like.