HOUSE OF REPRESENTATIVES

H.B. NO.

2700

TWENTY-FIFTH LEGISLATURE, 2010

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to taxation.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§237-    Rewards club central fund.  Any law to the contrary notwithstanding, there shall be levied, assessed, and collected, pursuant to this chapter, a general excise tax equal to four per cent of the gross rental proceeds from a reward club central fund received by an operator of a transient accommodation.  The tax under this section is in addition to any other tax liability imposed on the operator by this chapter.

     For the purposes of this section,

     "Gross rental proceeds" has the same meaning as that term in defined in section 237D-1.

     "Transient accommodation" has the same meaning as that term is defined in section 237D-1."

     SECTION 2.  Section 237D-1, Hawaii Revised Statutes, is amended by amending the definition of "gross rental" or "gross rental proceeds" to read as follows:

     "Gross rental" or "gross rental proceeds" means the gross receipts, cash or accrued, of the taxpayer received as compensation for the furnishing of transient accommodations and the value proceeding or accruing from the furnishing of [such] the accommodations without any deductions on account of the cost of property or services sold, the cost of materials used, labor cost, taxes, royalties, interest, discounts, or any other expenses whatsoever.

     Every taxpayer shall be presumed to be dealing on a cash basis unless the taxpayer proves to the satisfaction of the department of taxation that the taxpayer is dealing on an accrual basis and the taxpayer's books are so kept, or unless the taxpayer employs or is required to employ the accrual basis for the purposes of the tax imposed by chapter 237 for any taxable year, in which event the taxpayer shall report the taxpayer's gross income for the purposes of this chapter on the accrual basis for the same period.

     "Gross rental proceeds" includes the compensation received from a rewards club central fund to the operator of a transient accommodation when:

     (1)  A rewards club member occupies the transient accommodation; and

     (2)  The compensation was not contributed by the operator.

     The gross rental proceeds shall be calculated on an annual basis as the difference between the amount contributed by the operator of the transient accommodation to the rewards club central fund during a taxable year and the amount received by the operator from the rewards club central fund when a rewards club member occupies a transient accommodation during that taxable year.

     The words "gross rental" or "gross rental proceeds" shall not be construed to include the amounts of taxes imposed by chapter 237 or this chapter on operators of transient accommodations and passed on, collected, and received from the consumer as part of the receipts received as compensation for the furnishing of transient accommodations.  Where transient accommodations are furnished through arrangements made by a travel agency or tour packager at noncommissionable negotiated contract rates and the gross income is divided between the operator of transient accommodations on the one hand and the travel agency or tour packager on the other hand, gross rental or gross rental proceeds to the operator means only the respective portion allocated or distributed to the operator, and no more.  For purposes of this definition where the operator maintains a schedule of rates for identifiable groups of individuals, such as kamaainas, upon which the accommodations are leased, let, or rented, gross rental or gross rental proceeds means the receipts collected and received based upon the scheduled rates and recorded as receipts in its books and records."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2009.

 

INTRODUCED BY:

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Report Title:

General Excise Tax; Transient Accommodations Tax; Rewards Club Central Fund

 

Description:

Imposes the general excise tax and the transient accommodations tax on gross rental proceeds received from a rewards club central fund to the operator of a transient accommodation.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.