REPORT TITLE:
Telephone Calling Service


DESCRIPTION:
Specifies that the sale of prepaid telephone calling services
(services) is subject to the general excise tax (GET) at the
point of sale.  Clarifies that such services are subject to the
GET rather than the public service company tax.  (HB1970 HD2)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        1970
HOUSE OF REPRESENTATIVES                H.B. NO.           H.D. 2
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO PREPAID TELEPHONE CALLING SERVICE.



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-     Sales of telecommunications services through
 
 5 prepaid telephone calling service.  (a)  For the purposes of this
 
 6 section, "prepaid telephone calling service" means the right to
 
 7 exclusively purchase telecommunication services, paid for in
 
 8 advance, that enables the origination of calls using an access
 
 9 number or authorization code, whether manually or electronically
 
10 dialed.
 
11      (b)  If the sale or recharge of a prepaid telephone calling
 
12 service does not take place at the vendor's place of business, it
 
13 shall be conclusively determined to take place at the customer's
 
14 shipping address; or if there is no item shipped, then it shall
 
15 be the customer's billing address.
 
16      (c)  When a person licensed under this chapter sells prepaid
 
17 telephone calling services to a licensed retail merchant, jobber,
 
18 or other licensed seller for purposes of resale, the person shall
 
19 be taxed as a wholesaler selling tangible personal property.  All
 

 
Page 2                                                     1970
                                     H.B. NO.           H.D. 2
                                                        
                                                        

 
 1 other sales of prepaid telephone calling services shall be taxed
 
 2 as retail sales of tangible personal property.
 
 3      (d)  For purposes of prepaid telephone calling services
 
 4 only, all such services shall be taxed under this section and
 
 5 shall be in lieu of taxation under chapter 239."
 
 6      SECTION 2.  Section 238-1, Hawaii Revised Statutes, is
 
 7 amended by amending the definition of "property" to read:
 
 8      ""Property" means tangible personal property[,] and prepaid
 
 9 telephone calling services, but does not include newspapers or
 
10 other periodical publications purchased on the subscription plan,
 
11 issued at stated intervals as frequently as four times a year,
 
12 and of the class admitted to the United States mails as second
 
13 class matter under the laws and regulations governing the postal
 
14 service on January 1, 1965."
 
15      SECTION 3.  Statutory material to be repealed is bracketed.
 
16 New statutory material is underscored.
 
17      SECTION 4.  This Act shall take effect on September 1, 2000;
 
18 provided that:
 
19      (1)  Section 1 of this Act shall apply to gross income and
 
20           gross receipts received after August 31, 2000; and
 
21      (2)  Section 2 of this Act shall apply to all taxes accruing
 
22           after August 31, 2000.