HAR § 18-235-38.5-01 — Total value of property attributable to state: $6,041,096 Property factor ($6,041,096/$500,000,000) 0

012082 (2) The payroll factor shall be determined in accordance with sections 235-33 and 235-34, HRS, and the rules interpreting those sections. (3) The following rules apply with respect to the sales factor. (A) The denominator of the sales factor shall include the total gross receipts derived by the taxpayer from transactions and activity in the regular course of its trade or business, except receipts that may be excluded under sections 18-235-35-01 to 18-235-36-02, section 18-235-38-03, or subparagraph (B). (B) The numerator of the sales factor shall include all gross receipts of the taxpayer from sources within Hawaii, including, but not limited to, the following. (i) Gross receipts derived from the sale of tangible personal property, including printed materials, delivered or shipped to a purchaser or a subscriber in Hawaii. (ii) Except as provided in clause (c)(3)(B)(iii), gross receipts derived from advertising and the sale, rental, or other use of the taxpayer’s customer lists or any portion of them shall be attributed to Hawaii as determined by the taxpayer’s “circulation factor” during the tax period. The circulation factor shall be determined for each individual publication by the taxpayer of printed material containing advertising, and shall be equal to the ratio that the taxpayer’s in-state circulation to purchasers and subscribers of its printed material bears to its total circulation to purchasers and subscribers everywhere. The circulation factor for an individual publication shall be determined by reference to the rating statistics as reflected in such sources as Audit Bureau of Circulations or other comparable sources, provided that the source selected is consistently used from year to year for this purpose. If none of the foregoing sources are available, or, if available, none is in form or content sufficient for these purposes, then the circulation factor shall be determined from the taxpayer’s books and records. (iii) When specific items of advertisements can be shown, upon clear and convincing evidence, to have been distributed solely to a limited regional or local geographic area in which Hawaii is located, the taxpayer may petition, or the department may require, that a portion of such receipts be attributed to the sales factor numerator of Hawaii on the basis of a regional or local geographic area circulation factor and not upon the basis of the circulation factor as provided in clause (c)(3)(B)(ii). This attribution shall be based upon the ratio that the taxpayer’s circulation to purchasers and subscribers located in Hawaii of the printed material containing specific items of advertising bears to its total circulation of the printed material to purchasers and subscribers located within that regional or local geographic area. This alternative attribution method shall be permitted only upon the condition that these receipts are not double counted or otherwise included in the numerator of any other state. (iv) If the purchaser or subscriber is the United States Government or the taxpayer is not taxable in a State, the gross receipts from all sources, including the receipts from the sale of printed material, from advertising, and from the sale, rental, or other use of the taxpayer’s customer lists, or any portion of them that would have been attributed by the circulation factor to the numerator of the sales factor for that State, shall be included in the numerator of the sales factor of Hawaii if the printed material or other property is shipped from an office, store, warehouse, factory, or other place of storage or business in Hawaii.