HAR § 18-235-38-06.01 — Apportionment of income for ocean carriers

(a) As used in this section: “Originating revenue within this State” means revenue to an ocean carrier from the transportation of revenue passengers and revenue cargo first received by the carrier either as originating or connecting traffic at ports within the State. “Revenue tons handled”, for an ocean carrier at a port, mean the weight in tons of revenue passengers (at five hundred pounds per passenger) and revenue cargo first received as originating or connecting traffic, or finally discharged by the carrier at the port. “V oyage hours” mean the total hours the ocean carrier’s vessels have spent over the high seas plus the hours spent in port. V oyage hours do not include hours when vessels are withheld from service because of strikes, repairs or maintenance, acts of God, or seasonal reduction of service. (b) Business income of an ocean carrier shall be apportioned to Hawaii by multiplying the income by a fraction, the denominator of which is three and the numerator of which is the sum of the following three ratios: (1) The ratio of revenue tons handled by the ocean carrier at ports within this State during the taxable year to the total revenue tons handled by the carrier at ports within and without this State during the same period; (2) The ratio of the ocean carrier’s originating revenue within this State for the taxable year to the carrier’s total originating revenue within and without this State for the same period; and (3) The ratio of the ocean carrier’s voyage hours within this State for the taxable year to the carrier’s total voyage hours within and without this State for the same period. (c) For an ocean carrier incorporated in Hawaii, the numerator in each of the ratios in subsection (b) (1), (2), and (3) shall include that portion of revenue tons, originating revenues, and voyage hours attributable to jurisdictions in which the ocean carrier is not taxable.