Hawaii might require some providers of services on behalf of another seller to be subject to tax as sellers.
Services on Behalf of Sellers
Those who might be subject to general excise and use tax as the seller are:
- customer service providers;
- payment processing services; and
- fulfillment control services.
Generally, legislation passed by the House of Representatives would change definitions to include these service providers when they:
- sell tangible personal property on behalf of another seller; or
- assist in the sale of tangible personal property on behalf of another seller.
Original Seller Would Be Deemed the Wholesaler
Furthermore, the wholesaler subject to a lower tax rate would be the seller on whose behalf the sale is made.
The text of H.B. 1655 is available on the Hawaii Legislature’s website at https://www.capitol.hawaii.gov/session2018/bills/HB1655_.pdf.
Senate Version
The Hawaii Senate also passed similar provisions in S.B. 2890.
H.B. 1655, as passed by the Hawaii House of Representatives on March 6, 2018
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Author: CCHTaxGroup
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