HRS § 237-24.7 — Additional amounts not taxable


§237-24.7 Additional amounts not taxable.
In addition to the amounts not taxable under section 237-24, this chapter shall
not apply to:
(1) Amounts received by the operator of a hotel from
the owner of the hotel or from a time share association, and amounts received
by the suboperator of a hotel from the owner of the hotel, from a time share
association, or from the operator of the hotel, in amounts equal to and that
are disbursed by the operator or suboperator for employee wages, salaries,
payroll taxes, insurance premiums, and benefits, including retirement,
vacation, sick pay, and health benefits. As used in this paragraph:
"Employee" means employees directly
engaged in the day-to-day operation of the hotel and employed by the operator
or suboperator.
"Hotel" means an operation as
defined in section 445-90 or a time share plan as defined in section 514E-1.
"Operator" means any person who,
pursuant to a written contract with the owner of a hotel or time share
association, operates or manages the hotel for the owner or time share
association.
"Owner" means the fee owner or
lessee under a recorded lease of a hotel.
"Suboperator" means any person who,
pursuant to a written contract with the operator, operates or manages the hotel
as a subcontractor of the operator.
"Time share association" means an "association"
as that term is defined in section 514E-1;
(2) Amounts received by the operator of a county
transportation system operated under an operating contract with a political
subdivision, where the political subdivision is the owner of the county
transportation system. As used in this paragraph:
"County transportation system"
means a mass transit system of motorized buses providing regularly scheduled
transportation within a county.
"Operating contract" or "contract"
means a contract to operate and manage a political subdivision's county
transportation system, which provides that:
(A) The political subdivision shall exercise
substantial control over all aspects of the operator's operation;
(B) The political subdivision controls the
development of transit policy, service planning, routes, and fares; and
(C) The operator develops in advance a draft
budget in the same format as prescribed for agencies of the political
subdivision. The budget must be subject to the same constraints and controls
regarding the lawful expenditure of public funds as any public sector agency,
and deviations from the budget must be subject to approval by the appropriate
political subdivision officials involved in the budgetary process.
"Operator" means any person who,
pursuant to an operating contract with a political subdivision, operates or
manages a county transportation system.
"Owner" means a political
subdivision that owns or is the lessee of all the properties and facilities of
the county transportation system (including buses, real estate, parking
garages, fuel pumps, maintenance equipment, office supplies, etc.), and that
owns all revenues derived therefrom;
(3) Surcharge taxes on rental motor vehicles imposed
by chapter 251 and passed on and collected by persons holding certificates of
registration under that chapter;
(4) Amounts received by the operator of orchard
properties from the owner of the orchard property in amounts equal to and that
are disbursed by the operator for employee wages, salaries, payroll taxes,
insurance premiums, and benefits, including retirement, vacation, sick pay, and
health benefits. As used in this paragraph:
"Employee" means an employee
directly engaged in the day-to-day operations of the orchard properties and
employed by the operator.
"Operator" means a producer who,
pursuant to a written contract with the owner of the orchard property, operates
or manages the orchard property for the owner where the property contains an
area sufficient to make the undertaking economically feasible.
"Orchard property" means any real
property that is used to raise trees with a production life cycle of fifteen
years or more producing fruits or nuts having a normal period of development
from the initial planting to the first commercially saleable harvest of not
less than three years.
"Owner" means a fee owner or lessee
under a recorded lease of orchard property;
(5) Amounts received under property and casualty
insurance policies for damage or loss of inventory used in the conduct of a
trade or business located within the State or a portion thereof that is
declared a natural disaster area by the governor pursuant to section 209-2;
(6) Amounts received as compensation by community
organizations, school booster clubs, and nonprofit organizations under a
contract with the chief election officer for the provision and compensation of
precinct officials and other election-related personnel, services, and
activities, pursuant to section 11-5;
(7) Interest received by a person domiciled outside
the State from a trust company (as defined in section 412:8-101) acting as
payment agent or trustee on behalf of the issuer or payees of an interest
bearing instrument or obligation, if the interest would not have been subject
to tax under this chapter if paid directly to the person domiciled outside the
State without the use of a paying agent or trustee; provided that if the
interest would otherwise be taxable under this chapter if paid directly to the
person domiciled outside the State, it shall not be exempt solely because of
the use of a Hawaii trust company as a paying agent or trustee;
(8) Amounts received by a management company from
related entities engaged in the business of selling interstate or foreign
common carrier telecommunications services in amounts equal to and that are
disbursed by the management company for employee wages, salaries, payroll
taxes, insurance premiums, and benefits, including retirement, vacation, sick
pay, and health benefits. As used in this paragraph:
"Employee" means employees directly
engaged in the day-to-day operation of related entities engaged in the business
of selling interstate or foreign common carrier telecommunications services and
employed by the management company.
"Management company" means any
person who, pursuant to a written contract with a related entity engaged in the
business of selling interstate or foreign common carrier telecommunications
services, provides managerial or operational services to that entity.
"Related entities" means:
(A) An affiliated group of corporations within
the meaning of section 1504 (with respect to affiliated group defined) of the
federal Internal Revenue Code of 1986, as amended;
(B) A controlled group of corporations within
the meaning of section 1563 (with respect to definitions and special rules) of
the federal Internal Revenue Code of 1986, as amended;
(C) Those entities connected through ownership
of at least eighty per cent of the total value and at least eighty per cent of
the total voting power of each entity (or combination thereof), including
partnerships, associations, trusts, S corporations, nonprofit corporations,
limited liability partnerships, or limited liability companies; and
(D) Any group or combination of the entities
described in paragraph (C) constituting a unitary business for income tax
purposes;
whether or not the entity is located within or
without the State or licensed under this chapter; and
(9) Amounts received as grants under section 206M-15.