REPORT TITLE:
Taxation


DESCRIPTION:
Exempts exported services from GTE; imposes use tax on imported
services.  (SB44 HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        44
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                H.D. 2
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO TAXATION.



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

 1      SECTION 1.  Chapter 237, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "�237-    Exemption for contracting or services exported out
 
 5 of State.  (a)  There shall be exempted from, and excluded from
 
 6 the measure of, taxes imposed by this chapter, all of the value
 
 7 or gross income derived from contracting (as defined under
 
 8 section 237-6) or services performed by a person engaged in a
 
 9 service business or calling in the State for a customer located
 
10 outside the State where:
 
11      (1)  The contracting or services are for resale,
 
12           consumption, or use outside the State; and
 
13      (2)  The value or gross income derived from the contracting
 
14           or services performed would otherwise be subject to the
 
15           tax imposed under this chapter on contracting or
 
16           services at the highest rate.
 
17 For the purposes of this subsection, the seller or person
 
18 rendering the contracting or services exported and resold,
 
19 consumed, or used outside the State shall take from the customer,
 
20 a certificate or an equivalent, in a form the department
 

 
Page 2                                                     44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1 prescribes, certifying that the contracting or service purchased
 
 2 is to be otherwise resold, consumed, or used outside the State.
 
 3 Any customer who furnishes this certificate or an equivalent
 
 4 shall be obligated to pay the seller or person rendering the
 
 5 contracting or services, upon demand, if the contracting or
 
 6 service purchased is not resold or otherwise consumed or used
 
 7 outside the State, the amount of the additional tax which by
 
 8 reason thereof is imposed upon the seller or person rendering the
 
 9 contracting or service.
 
10      (b)  There shall be exempted from, and excluded from the
 
11 measure of, taxes imposed by this chapter, all of the value or
 
12 gross income derived from contracting (as defined in section
 
13 237-6) or services performed by a person engaged in a service
 
14 business or calling in the State for a purchaser who resells all
 
15 of the contracting or services for resale, consumption, or use
 
16 outside the State pursuant to subsection (a).  For the purposes
 
17 of this subsection, the seller or person rendering the
 
18 contracting or services for a purchaser who resells the
 
19 contracting or services for resale, consumption, or use outside
 
20 the State shall take from the purchaser, a certificate or an
 
21 equivalent, in a form that the department prescribes, certifying
 
22 that the contracting or services purchased is to be resold to a
 

 
 
 
Page 3                                                     44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1 customer of the purchaser who has complied with subsection (a).
 
 2 Any purchaser who furnishes this certificate or an equivalent
 
 3 shall be obligated to pay the seller or person rendering the
 
 4 contracting or services, upon demand, if the contracting or
 
 5 services purchased is not resold in its entirety to a customer of
 
 6 the purchaser who has complied with subsection (a), the amount of
 
 7 the additional tax which by reason thereof is imposed upon the
 
 8 seller or the person rendering the contracting or service.
 
 9      (c)  For purposes of this section, "service business or
 
10 calling" includes all activities engaged in for other persons for
 
11 a consideration that involve the rendering of a service as
 
12 distinguished from the sale of tangible personal property or the
 
13 production and sale of tangible personal property.  "Service
 
14 business or calling" includes professional services, but does not
 
15 include service rendered by an employee to the employee's
 
16 employer."
 
17      SECTION 2.  Chapter 238, Hawaii Revised Statutes, is amended
 
18 by adding a new section to be appropriately designated and to
 
19 read as follows:
 
20      "�238-    Imposition of tax on imported services;
 
21 exemptions.  (a)  There is hereby levied an excise tax on the
 
22 value of services that are performed by an unlicensed seller at a
 

 
 
 
Page 4                                                     44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1 point outside the State and imported or purchased for use in this
 
 2 State.  The rates of the tax hereby imposed and the exemptions
 
 3 from the tax are as follows:
 
 4      (1)  If the importer or purchaser is licensed under chapter
 
 5           237 and is:
 
 6           (A)  Engaged in a service business or calling in which
 
 7                the imported or purchased services become
 
 8                identifiable elements, excluding overhead, of the
 
 9                services rendered, and the gross income of the
 
10                importer or purchaser is subject to the tax
 
11                imposed under chapter 237 on services at the rate
 
12                of one-half of one per cent; or
 
13           (B)  A manufacturer importing or purchasing services
 
14                that become identifiable elements, excluding
 
15                overhead, of a finished or saleable product
 
16                (including the container or package in which the
 
17                product is contained) and the finished or saleable
 
18                product is to be sold in a manner that results in
 
19                a further tax on the activity of the manufacturer
 
20                as a wholesaler, and not a retailer;
 
21           there shall be no tax imposed on the value of the
 
22           imported or purchased services; provided that if the
 

 
 
 
Page 5                                                     44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1           manufacturer is also engaged in business as a retailer
 
 2           as classified under chapter 237, paragraph (2) shall
 
 3           apply to the manufacturer, but the director of taxation
 
 4           shall refund to the manufacturer, in the manner
 
 5           provided under section 231-23(c), that amount of tax
 
 6           that the manufacturer, to the satisfaction of the
 
 7           director, shall establish to have been paid by the
 
 8           manufacturer to the director with respect to services
 
 9           that have been used by the manufacturer for the
 
10           purposes stated in this paragraph.
 
11      (2)  If the importer or purchaser is a person licensed under
 
12           chapter 237 and is:
 
13           (A)  Engaged in a service business or calling in which
 
14                the imported or purchased services become
 
15                identifiable elements, excluding overhead, of the
 
16                services rendered, and the gross income from those
 
17                services when sold by the importer or purchaser is
 
18                subject to the tax imposed under chapter 237 at
 
19                the highest rate; or
 
20           (B)  A manufacturer importing or purchasing services
 
21                that become identifiable elements, excluding
 
22                overhead, of the finished or saleable manufactured
 

 
 
 
Page 6                                                     44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1                product (including the container or package in
 
 2                which the product is contained) and the finished
 
 3                or saleable product is to be sold in a manner that
 
 4                results in a further tax under chapter 237 on the
 
 5                activity of the manufacturer as a retailer; or
 
 6           (C)  A contractor importing or purchasing services that
 
 7                become identifiable elements, excluding overhead,
 
 8                of the finished work or project required, under
 
 9                the contract, and where the gross proceeds derived
 
10                by the contractor are subject to the tax under
 
11                section 237-13(3) or or 237-16 as a contractor;
 
12           the tax shall be one-half of one per cent of the value
 
13           of the imported or purchased services.
 
14      (3)  In all other cases, the importer or purchaser is
 
15           subject to the tax at the rate of four per cent on the
 
16           value of the imported or purchased services."
 
17      SECTION 3.  Section 237-21, Hawaii Revised Statutes, is
 
18 amended to read as follows:
 
19      "�237-21  Apportionment.  If any person, other than persons
 
20 liable to the tax on manufacturers as provided by section
 
21 237-13(1), is engaged in business both within and without the
 
22 State or in selling goods for delivery outside the State, and if
 

 
 
 
Page 7                                                     44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1 under the Constitution or laws of the United States or section
 
 2 237-29.5 [or 237-29.6] the entire gross income of such person
 
 3 cannot be included in the measure of this tax, there shall be
 
 4 apportioned to the State and included in the measure of the tax
 
 5 that portion of the gross income which is derived from activities
 
 6 within the State, to the extent that the apportionment is
 
 7 required by the Constitution or laws of the United States or
 
 8 section 237-29.5 [or 237-29.6].  In the case of a tax upon the
 
 9 production of property in the State the apportionment shall be
 
10 determined as in the case of the tax on manufacturers.  In other
 
11 cases, if and to the extent that the apportionment cannot be
 
12 accurately made by separate accounting methods, there shall be
 
13 apportioned to the State and included in the measure of this tax
 
14 that proportion of the total gross income, so requiring
 
15 apportionment, which the cost of doing business within the State,
 
16 applicable to the gross income, bears to the cost of doing
 
17 business both within and without the State, applicable to the
 
18 gross income."
 
19      SECTION 4.  Section 238-1, Hawaii Revised Statutes, is
 
20 amended as follows:
 
21      1.  By adding three new definitions to be appropriately
 
22 inserted and to read as follows:
 

 
 
 
Page 8                                                     44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1      ""Foreign customer" means a nonresident person who:
 
 2      (1)  Is not subject to chapter 237;
 
 3      (2)  Has not been physically present in the State for more
 
 4           than thirty days in the six months prior to entering
 
 5           into a written exported contracting or services
 
 6           agreement with a person licensed under chapter 237
 
 7           engaged in contracting (as defined in section 237-6) or
 
 8           a service business or calling; and
 
 9      (3)  Is the sole recipient of the exported contracting or
 
10           services provided through a person in Hawaii engaged in
 
11           contracting or a service business or calling and
 
12           licensed under chapter 237.
 
13      "Overhead" means continuous or general costs occurring in
 
14 the normal course of a business, including but not limited to
 
15 costs for labor, rent, taxes, royalties, interest, discounts
 
16 paid, insurance, lighting, heating, cooling, accounting, legal
 
17 fees, equipment and facilities, telephone systems, depreciation,
 
18 and amortization.
 
19      "Service business or calling" includes all activities
 
20 engaged in for other persons for a consideration that involve the
 
21 rendering of a service as distinguished from the sale of tangible
 
22 personal property or the production and sale of tangible
 

 
 
 
Page 9                                                     44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1 property.  "Service business or calling" includes professional
 
 2 services, but does not include services rendered by an employee
 
 3 to the employee's employer."
 
 4      2.  By amending the definitions of "price", "purchase" and
 
 5 "sale", "purchaser", "representation", "seller", and "use" to
 
 6 read:
 
 7      ""Price" means the total amount for which tangible personal
 
 8 property [is] or services are purchased, valued in money, whether
 
 9 paid in money or otherwise, and wheresoever paid[,]; provided
 
10 that cash discounts allowed and taken on sales shall not be
 
11 included.
 
12      "Purchase" and "sale" [mean and refer to] means any
 
13 transfer, exchange, or barter, conditional or otherwise, in any
 
14 manner or by any means, wheresoever consummated, of tangible
 
15 personal property or services for a consideration.
 
16      "Purchaser" means any person purchasing property or services
 
17 and "importer" means any person importing property[;] or
 
18 services; provided that the terms "purchaser" and "importer"
 
19 shall not include the State, its political subdivisions, or
 
20 wholly owned agencies or instrumentalities of the State or a
 
21 political subdivision; or the United States, its wholly owned
 
22 agencies or instrumentalities, or any person immune from the tax
 

 
 
 
Page 10                                                    44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1 imposed by this chapter under the Constitution and laws of the
 
 2 United States but the terms shall include national banks.
 
 3      "Representation" refers to any or all of the following:
 
 4      (1)  A seller being present in the State;
 
 5      (2)  A seller having in the State a salesperson, commission
 
 6           agent, manufacturer's representative, broker, or other
 
 7           person who is authorized or employed by the seller to
 
 8           assist the seller in selling property or services for
 
 9           use or consumption in the State, by procuring orders
 
10           for the sales, making collections or deliveries, or
 
11           otherwise; and
 
12      (3)  A seller having in the State a person upon whom process
 
13           directed to the seller from the courts of the State may
 
14           be served, including the director of commerce and
 
15           consumer affairs and the deputy director in the cases
 
16           provided in section 415-14.
 
17      "Seller" means any person engaged in the business of selling
 
18 tangible personal property[,] or services, wheresoever engaged,
 
19 but does not include the United States or its wholly owned
 
20 agencies or instrumentalities other than national banks, the
 
21 State or a political subdivision thereof, or wholly owned
 
22 agencies or instrumentalities of the State or a political
 
23 subdivision.
 

 
Page 11                                                    44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1      "Use" (and any nounal, verbal, [adjective,] adjectival,
 
 2 adverbial, and other equivalent form of the term) herein used
 
 3 interchangeably means any use, whether the use is of such nature
 
 4 as to cause the property or services to be appreciably consumed
 
 5 or not, or the keeping of the property or services for such use
 
 6 or for sale, and shall include the exercise of any right or power
 
 7 over tangible or intangible personal property incident to the
 
 8 ownership of that property, but the term "use" shall not include:
 
 9      (1)  Temporary use of property, not of a perishable or
 
10           quickly consumable nature, where the property is
 
11           imported into the State for temporary use (not sale)
 
12           therein by the person importing the same and is not
 
13           intended to be, and is not, kept permanently in the
 
14           State (as for example without limiting the generality
 
15           of the foregoing language:
 
16           (A)  [in] In the case of a contractor importing
 
17                permanent equipment for the performance of a
 
18                construction contract, with intent to remove, and
 
19                who does remove, the equipment out of the State
 
20                upon completing the contract;
 
21           (B)  [in] In the case of moving picture films imported
 
22                for use in theaters in the State with intent or
 

 
 
 
Page 12                                                    44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1                under contract to transport the same out of the
 
 2                State after completion of such use; and
 
 3           (C)  [in] In the case of a transient visitor importing
 
 4                an automobile or other belongings into the State
 
 5                to be used by the transient visitor while therein
 
 6                but which are to be used and are removed upon the
 
 7                transient visitor's departure from the State);
 
 8      (2)  Use by the taxpayer of property acquired by the
 
 9           taxpayer solely by way of gift;
 
10      (3)  Use which is limited to the receipt of articles and the
 
11           return thereof, to the person from whom acquired,
 
12           immediately or within a reasonable time either after
 
13           temporary trial or without trial;
 
14      (4)  Use of goods imported into the State by the owner of a
 
15           vessel or vessels engaged in interstate or foreign
 
16           commerce and held for and used only as ship stores for
 
17           the vessels;
 
18      (5)  The use or keeping for use of household goods, personal
 
19           effects, and private automobiles imported into the
 
20           State for nonbusiness use by a person who:
 
21           (A)  [acquired] Acquired them in another state,
 
22                territory, district, or country[,] ;
 

 
 
 
Page 13                                                    44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1           (B)  [at] At the time of the acquisition was a bona
 
 2                fide resident of another state, territory,
 
 3                district, or country[,] ;
 
 4           (C)  [acquired Acquired the property for use outside
 
 5                the State[,]; and
 
 6           (D)  [made] Made actual and substantial use thereof
 
 7                outside this State;
 
 8           provided that as to an article acquired less than three
 
 9           months prior to the time of its importation into the
 
10           State it shall be presumed, until and unless clearly
 
11           proved to the contrary, that it was acquired for use in
 
12           the State and that its use outside the State was not
 
13           actual and substantial;
 
14      (6)  The leasing or renting of any aircraft or the keeping
 
15           of any aircraft solely for leasing or renting to
 
16           lessees or renters using the aircraft for commercial
 
17           transportation of passengers and goods;
 
18      (7)  The use of oceangoing vehicles for passenger or
 
19           passenger and goods transportation from one point to
 
20           another within the State as a public utility as defined
 
21           in chapter 269; [and]
 

 
 
 
 
 
Page 14                                                    44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1      (8)  The use of material, parts, or tools imported or
 
 2           purchased by a person licensed under chapter 237 which
 
 3           are used for aircraft service and maintenance, or the
 
 4           construction of an aircraft service and maintenance
 
 5           facility as those terms are defined in section
 
 6           237-24.9[.]; and
 
 7      (9)  The use of services imported for resale to a foreign
 
 8           customer located outside the State to the extent the
 
 9           services are resold, consumed, or used by that foreign
 
10           customer outside the State pursuant to section
 
11           237-    (a).
 
12      With regard to purchases made and distributed under the
 
13 authority of chapter 421, a cooperative association shall be
 
14 deemed the user thereof."
 
15      SECTION 5.  Section 238-3, Hawaii Revised Statutes, is
 
16 amended as follows:
 
17      1.  By amending subsections (a), (b), (c), and (d) to read
 
18 as follows:
 
19      "(a)  The tax imposed by this chapter shall not apply to any
 
20 property[,] or services, or to any use of the property[,] or
 
21 services, which cannot legally be so taxed under the Constitution
 
22 or laws of the United States, but only so long as, and only to
 
23 the extent to which the State is without power to impose the tax.
 

 
Page 15                                                    44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1      Any provision of law to the contrary notwithstanding,
 
 2 exemptions or exclusions from tax under this chapter allowed on
 
 3 or before April 1, 1978, under the provisions of the Constitution
 
 4 of the United States or an act of the Congress of the United
 
 5 States to persons or common carriers engaged in interstate or
 
 6 foreign commerce, or both, whether ocean-going or air, shall
 
 7 continue undiminished and be available thereafter.
 
 8      (b)  The tax imposed by this chapter shall not apply to any
 
 9 use of property or services the transfer of which property or
 
10 services to, or the acquisition of which by, the person so using
 
11 the same, has actually been or actually is taxed under chapter
 
12 237.
 
13      (c)  The tax imposed by this chapter shall be paid only once
 
14 upon or in respect of the same property[;] or services; provided
 
15 that nothing in this chapter contained shall be construed to
 
16 exempt any property or services or the use thereof from taxation
 
17 under any other law of the State.
 
18      (d)  The tax imposed by this chapter shall be in addition to
 
19 any other taxes imposed by any other laws of the State, except as
 
20 otherwise specifically provided herein; provided that if it be
 
21 finally held by any court of competent jurisdiction, that the tax
 
22 imposed by this chapter may not legally be imposed in addition to
 

 
 
 
Page 16                                                    44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1 any other tax or taxes imposed by any other law or laws with
 
 2 respect to the same property or services or the use thereof, then
 
 3 this chapter shall be deemed not to apply to the property or
 
 4 services and the use thereof under such specific circumstances,
 
 5 but such other laws shall be given full effect with respect to
 
 6 the property or services and use."
 
 7      2.  By amending subsections (i) and (j) to read as follows:
 
 8      "(i)  Each taxpayer liable for the tax imposed by this
 
 9 chapter on tangible personal property or services shall be
 
10 entitled to full credit for the combined amount or amounts of
 
11 legally imposed sales or use taxes paid by the taxpayer with
 
12 respect to the same transaction and property or services to
 
13 another state and any subdivision thereof, but such credit shall
 
14 not exceed the amount of the use tax imposed under this chapter
 
15 on account of the transaction and property[.] or services.  The
 
16 director of taxation may require the taxpayer to produce the
 
17 necessary receipts or vouchers indicating the payment of the
 
18 sales or use tax to another state or subdivision as a condition
 
19 for the allowance of the credit.
 
20      (j)  The tax imposed by this chapter shall not apply to any
 
21 use of property or services exempted by section 237-26 or section
 
22 237-29."
 

 
 
 
Page 17                                                    44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1      SECTION 6.  Section 238-5, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (a) to read as follows:
 
 3      "(a)  On or before the last day of each calendar month, any
 
 4 person who has become liable for the payment of a tax under this
 
 5 chapter during the preceding calendar month in respect of any
 
 6 property or services or the use thereof, shall file a return with
 
 7 the assessor of the taxation district in which the property was
 
 8 held or the services were received when the tax first became
 
 9 payable, or with the director of taxation at Honolulu, setting
 
10 forth a description of the property or services and the character
 
11 and quantity thereof in sufficient detail to identify the same or
 
12 otherwise in such reasonable detail as the director by rule shall
 
13 require, and the purchase price or value thereof as the case may
 
14 be.  The return shall be accompanied by a remittance in full of
 
15 the tax, computed at the rate specified in section 238-2 or 238-
 
16     upon the price or value so returned.  Any tax remaining
 
17 unpaid after the last day following the end of the calendar month
 
18 during which the tax first became payable shall become
 
19 delinquent; provided that a receipt from a seller required or
 
20 authorized to collect the tax, given to a taxpayer in accordance
 
21 with section 238-6, shall be sufficient to relieve the taxpayer
 
22 from further liability for the tax to which the receipt may
 
23 refer, or for the return thereof."
 

 
Page 18                                                    44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1      SECTION 7.  Section 238-6, Hawaii Revised Statutes, is
 
 2 amended by amending subsection (a) to read as follows:
 
 3      "(a)  For purposes of the taxes due under sections 238-2(3)
 
 4 [and], 238-2.5, and 238-   , every seller having in the State,
 
 5 regularly or intermittently, any property, tangible or
 
 6 intangible, any place of business, or any representation as
 
 7 hereinabove defined, (and irrespective of the seller's having or
 
 8 not having qualified to do business in the State) shall, if the
 
 9 seller makes sales of property or services for use in the State
 
10 (whether or not the sales are made in the State), collect from
 
11 the purchaser the taxes imposed by sections 238-2(3) [and],
 
12 238-2.5, and 238-   , on the use of the property or services so
 
13 sold by the seller.  The collection shall be made within twenty
 
14 days after the accrual of the tax or within such other period as
 
15 shall be fixed by the director of taxation upon the application
 
16 of the seller, and the seller shall give to the purchaser a
 
17 receipt therefor in the manner and form prescribed by the
 
18 director; provided that this subsection shall not apply to
 
19 vehicles registered under section 286-50."
 
20      SECTION 8.  Section 238-9, Hawaii Revised Statutes, is
 
21 amended to read as follows:
 

 
 
 
 
 
Page 19                                                    44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1      "�238-9  Records.  Every person who is engaged in any
 
 2 business in the State and who is required under this chapter to
 
 3 make returns, shall keep in the English language in the State and
 
 4 preserve for a period of three years, books of account or other
 
 5 records in sufficient detail to enable the director of taxation,
 
 6 as far as reasonably practicable, to determine whether or not any
 
 7 taxes imposed by this chapter are payable in respect of the
 
 8 property or services concerned, and if so payable, the amount
 
 9 thereof."
 
10      SECTION 9.  Section 237-29.6, Hawaii Revised Statutes, is
 
11 repealed.
 
12      ["[�237-29.6]  Exemption of certain computer services.(a)
 
13 There shall be exempted from, and excluded from the measure of,
 
14 the taxes imposed by this chapter all of the gross proceeds
 
15 arising from technical services necessary for the production and
 
16 sale of computer software where that software is shipped or
 
17 transmitted by the provider of technical services to a customer
 
18 at a point outside the State for use outside the State.
 
19      As used in this section: 
 
20      "Computer software" means a set of computer programs,
 
21 procedures, or associated documentation concerned with the
 
22 operation and function of a computer system, and includes both
 

 
 
 
Page 20                                                    44
                                     S.B. NO.           S.D. 1
                                                        H.D. 2
                                                        

 
 1 systems and application programs and subdivisions, such as
 
 2 assemblers, compilers, routines, generators, and utility
 
 3 programs. 
 
 4      "Technical services" include the development, design,
 
 5 modification, and programming of computer software. 
 
 6      (b)  For the purposes of this section, the provider of
 
 7 technical services shall take from the purchaser a certificate,
 
 8 in such form as the department shall prescribe, certifying that
 
 9 the software purchased is to be used outside the State.  Any
 
10 purchaser who shall furnish such a certificate shall be obligated
 
11 to pay to the provider of technical services, upon demand, if the
 
12 software purchased is used or sold by the purchaser in the State,
 
13 the amount of the additional tax which by reason of such use or
 
14 sale is imposed upon the provider of technical services."]
 
15      SECTION 10.  Statutory material to be repealed is bracketed.
 
16 New statutory material is underscored.
 
17      SECTION 11.  This Act shall take effect on January 1, 2000;
 
18 provided that sections 1 and 9 of this Act shall apply to gross
 
19 income and gross proceeds received after December 31, 1999, and
 
20 sections 2, 4, 5, 6, 7, and 8 of this Act shall apply to all
 
21 taxes accruing after December 31, 1999.