Tax News

CCH (cch.taxgroup.com) reports:

  A bill that would tax some Internet sales by expanding the definition of "engaging" in business and creating a rebuttable presumption for Hawaii general excise tax nexus purposes has been introduced in the Hawaii House of Representatives. The proposed bill is similar to New York's so-called "Amazon law," which was recently upheld by a New York state court. (TAXDAY, 2009/01/15, S.18)

  If enacted as introduced, the bill would provide that "engaging," as used in the general excise tax laws with reference to engaging or continuing in business, would include the sale of tangible personal property or taxable services by a person soliciting business through an independent contractor or other representative if the person entered into an agreement with a Hawaii resident who, for consideration, directly or indirectly referred potential customers to the person by a link on an Internet Web site or by other means. To qualify under this proposed definition, the cumulative gross receipts from sales by the person to customers in Hawaii who were referred to the person by such a resident would have to exceed $10,000 during the preceding four quarterly periods ending on the last day of February, May, August, and November. The presumption created by this provision could be rebutted by proof that the resident with whom the person had an agreement did not engage in any solicitation in Hawaii on behalf of the person that would satisfy the nexus requirement of the U.S. Constitution during the specified quarterly periods.

  Subscribers can view the introduced bill.

   
H.B. 1405, as introduced in the Hawaii House of Representatives on January 27, 2009