Hawaii Administrative Rules › Title 18 - DEPARTMENT OF TAXATION › Chapter 237 - GENERAL EXCISE TAX LAW › Subchapter 2 - LICENSES; TAX; EXEMPTIONS › Section 18-237-29.53-06 - Services provided by a travel agency or tour packager at noncommissioned negotiated contract rates

Current through June, 2024
(a) When transient
				accommodations are furnished through arrangements made by a travel agency or
				tour packager at noncommissioned negotiated contract rates, the travel agency's
				or tour packager's service is used or consumed where the transient
				accommodation is located
(b) When
				travel-related bookings other than transient accommodations are made or sold by
				a travel agency or tour packager at noncommissioned negotiated contract rates,
				the travel agency's or tour packager's service is used or consumed where the
				travel-related booking is located.
Example 1:
Travel Services Corporation ("TSC")
				  sells a five-night stay at Luau Loft, a hotel in Hawaii, to Tammy Traveler, a
				  resident of New Jersey. TSC arranges the transient accommodation at
				  noncommissioned negotiated contract rates. The contract between TSC and Luau
				  Loft provides that Luau Loft will receive ninety per cent of the net rate, the
				  best available rate offered by Luau Loft to the public at the time of the
				  transaction, and that TSC may unilaterally determine the mark-up of the net
				  rate and set the total price charged to the customer. TSC charges Tammy
				  Traveler $600 for the booking. The net rate at the time of TSC's sale to Tammy
				  Traveler is $100 per night, or $500 for five nights. TSC unilaterally sets the
				  mark-up for the booking and the final price of $600. All of the value or gross
				  income that TSC receives is not exempt under section
				  237-29.53,
				  HRS. TSC's service is used or consumed in Hawaii, where the transient
				  accommodation is located, because the transient accommodation was furnished
				  through arrangements made by a travel agency at noncommissioned negotiated
				  contract rates.
Example 2:
Assume the same facts as in Example
				  1, except that TSC books a five-day rental of a vehicle in Hawaii for Tammy
				  Traveler. TSC arranges the travel-related booking at noncommissioned negotiated
				  contract rates. The contract between TSC and the rental vehicle company
				  provides that the rental vehicle company will receive $50 per day for each
				  vehicle rented and that TSC may unilaterally determine the mark-up and set the
				  total price charged to the customer. TSC charges Tammy Traveler $300 for the
				  booking. All of the value or gross income that TSC receives is not exempt under
				  section
				  237-29.53,
				  HRS. TSC's service is used or consumed in Hawaii, where the travel-related
				  booking is located. The travel-related booking was made by a travel agency at
				  noncommissioned negotiated contract rates.
Example 3:
Alex Adventurer, a resident of
				  Hawaii, visits the office of Maui Travel Agency ("MTA"), a travel agency
				  located in Hawaii, to plan a vacation to Alaska. MTA sells a seven-night stay
				  at Glacier Hotel, a hotel in Alaska, to Alex Adventurer. MTA arranges the
				  transient accommodation at noncommissioned negotiated contract rates. The
				  contract between MTA and Glacier Hotel provides that Glacier Hotel will receive
				  $100 per room per night and that MTA may independently determine the mark-up
				  and set the total price charged to the customer. MTA charges Alex Adventurer
				  $1,000 for the booking, unilaterally determining to charge a mark-up of $300.
				  All of the value or gross income that MTA receives is exempt under section
				  237-29.53,
				  HRS. MTAs service is used or consumed in Alaska, where the transient
				  accommodation is located. The transient accommodation was furnished through
				  arrangements made by a travel agency at noncommissioned negotiated contract
				  rates.
Example 4:
Assume the same facts as in Example
				  3, except that the contract between MTA and Glacier Hotel provides that MTA may
				  book rooms at Glacier Hotel for $125 per room per night and that, for each
				  booking, MTA will receive ten per cent of the sale. MTA does not have die
				  authority to mark up or unilaterally change the total price charged to the
				  customer. Section 18-237-29.53-06 does not apply because transient
				  accommodations are not being furnished through arrangements made by a travel
				  agency at noncommissioned negotiated contract rates. Instead, MTA is a
				  commissioned agent and section
				  18-237-29.53-10 applies. Under
				  that rule, all of the value or gross income that MTA receives is not exempt
				  because MTA is in Hawaii and the booking occurred in Hawaii.