HRS § 237-4 — "Wholesaler", "jobber", defined


§237-4 "Wholesaler", "jobber",
defined. (a) "Wholesaler" or "jobber" applies only to
a person making sales at wholesale. Only the following are sales at wholesale:
(1) Sales to a licensed retail merchant, jobber, or
other licensed seller for purposes of resale;
(2) Sales to a licensed manufacturer of materials or
commodities that are to be incorporated by the manufacturer into a finished or
saleable product (including the container or package in which the product is
contained) during the course of its preservation, manufacture, or processing,
including preparation for market, and that will remain in such finished or
saleable product in such form as to be perceptible to the senses, which
finished or saleable product is to be sold and not otherwise used by the manufacturer;
(3) Sales to a licensed producer or cooperative
association of materials or commodities that are to be incorporated by the
producer or by the cooperative association into a finished or saleable product
that is to be sold and not otherwise used by the producer or cooperative
association, including specifically materials or commodities expended as
essential to the planting, growth, nurturing, and production of commodities
that are sold by the producer or by the cooperative association;
(4) Sales to a licensed contractor, of materials or
commodities that are to be incorporated by the contractor into the finished
work or project required by the contract and that will remain in such finished
work or project in such form as to be perceptible to the senses;
(5) Sales to a licensed producer, or to a cooperative
association described in section [237-23(a)(8)] for sale to a licensed
producer, or to a licensed person operating a feed lot, of poultry or animal
feed, hatching eggs, semen, replacement stock, breeding services for the
purpose of raising or producing animal or poultry products for disposition as
described in section 237-5 or for incorporation into a manufactured product as
described in paragraph (2) or for the purpose of breeding, hatching, milking,
or egg laying other than for the customer's own consumption of the meat,
poultry, eggs, or milk so produced; provided that in the case of a feed lot
operator, only the segregated cost of the feed furnished by the feed lot
operator as part of the feed lot operator's service to a licensed producer of
poultry or animals to be butchered or to a cooperative association described in
section [237-23(a)(8)] of such licensed producers shall be deemed to be a sale
at wholesale; and provided further that any amount derived from the furnishing
of feed lot services, other than the segregated cost of feed, shall be deemed
taxable at the service business rate. This paragraph shall not apply to the
sale of feed for poultry or animals to be used for hauling, transportation, or
sports purposes;
(6) Sales to a licensed producer, or to a cooperative
association described in section [237-23(a)(8)] for sale to the producer, of
seed or seedstock for producing agricultural and aquacultural products, or bait
for catching fish (including the catching of bait for catching fish), which
agricultural and aquacultural products or fish are to be disposed of as
described in section 237-5 or to be incorporated in a manufactured product as
described in paragraph (2);
(7) Sales to a licensed producer, or to a cooperative
association described in section [237-23(a)(8)] for sale to such producer; of
polypropylene shade cloth; of polyfilm; of polyethylene film; of cartons and
such other containers, wrappers, and sacks, and binders to be used for
packaging eggs, vegetables, fruits, and other agricultural and aquacultural
products; of seedlings and cuttings for producing nursery plants or
aquacultural products; or of chick containers; which cartons and such other
containers, wrappers, and sacks, binders, seedlings, cuttings, and containers
are to be used as described in section 237-5, or to be incorporated in a
manufactured product as described in paragraph (2);
(8) Sales of tangible personal property where:
(A) Tangible personal property is sold upon
the order or request of a licensed seller for the purpose of rendering a
service in the course of the person's service business or calling, or upon the
order or request of a person subject to tax under section 237D-2 for the
purpose of furnishing transient accommodations;
(B) The tangible personal property becomes or
is used as an identifiable element of the service rendered; and
(C) The cost of the tangible personal
property does not constitute overhead to the licensed seller;
(9) Sales to a licensed leasing company of capital
goods that have a depreciable life, are purchased by the leasing company for
lease to its customers, and are thereafter leased as a service to others;
(10) Sales of services to a licensed seller engaging
in a business or calling whenever:
(A) Either:
(i) In the context of a service-to-service
transaction, a service is rendered upon the order or request of a licensed
seller for the purpose of rendering another service in the course of the seller's
service business or calling, including a dealer's furnishing of goods or
services to the purchaser of tangible personal property to fulfill a warranty
obligation of the manufacturer of the property;
(ii) In the context of a service-to-tangible
personal property transaction, a service is rendered upon the order or request
of a licensed seller for the purpose of manufacturing, producing, or preparing
tangible personal property to be sold;
(iii) In the context of a services-to-contracting
transaction, a service is rendered upon the order or request of a licensed
contractor as defined in section 237-6 for the purpose of assisting that
licensed contractor; or
(iv) In the context of a services-to-transient
accommodations rental transaction, a service is rendered upon the order or
request of a person subject to tax under section 237D-2 for the purpose of
furnishing transient accommodations;
(B) The benefit of the service passes to the
customer of the licensed seller, licensed contractor, or person furnishing
transient accommodations as an identifiable element of the other service or
property to be sold, the contracting, or the furnishing of transient
accommodations;
(C) The cost of the service does not
constitute overhead to the licensed seller, licensed contractor, or person
furnishing transient accommodations;
(D) The gross income of the licensed seller
is not divided between the licensed seller and another licensed seller,
contractor, or person furnishing transient accommodations for imposition of the
tax under this chapter;
(E) The gross income of the licensed seller
is not subject to a deduction under this chapter or chapter 237D; and
(F) The resale of the service, tangible
personal property, contracting, or transient accommodations is subject to the
tax imposed under this chapter at the highest tax rate.
(11) Sales to a licensed retail merchant, jobber, or
other licensed seller of bulk condiments or prepackaged single-serving packets
of condiments that are provided to customers by the licensed retail merchant,
jobber, or other licensed seller;
(12) Sales to a licensed retail merchant, jobber, or
other licensed seller of tangible personal property that will be incorporated
or processed by the licensed retail merchant, jobber, or other licensed seller
into a finished or saleable product during the course of its preparation for
market (including disposable, nonreturnable containers, packages, or wrappers,
in which the product is contained and that are generally known and most
commonly used to contain food or beverage for transfer or delivery), and which
finished or saleable product is to be sold and not otherwise used by the
licensed retail merchant, jobber, or other licensed seller;
(13) Sales of amusements subject to taxation under
section 237-13(4) to a licensed seller engaging in a business or calling
whenever:
(A) Either:
(i) In the context of an amusement-to-service
transaction, an amusement is rendered upon the order or request of a licensed
seller for the purpose of rendering another service in the course of the seller's
service business or calling;
(ii) In the context of an amusement-to-tangible
personal property transaction, an amusement is rendered upon the order or
request of a licensed seller for the purpose of selling tangible personal
property; or
(iii) In the context of an amusement-to-amusement
transaction, an amusement is rendered upon the order or request of a licensed
seller for the purpose of rendering another amusement in the course of the
person's amusement business;
(B) The benefit of the amusement passes to
the customer of the licensed seller as an identifiable element of the other
service, tangible personal property to be sold, or amusement;
(C) The cost of the amusement does not
constitute overhead to the licensed seller;
(D) The gross income of the licensed seller
is not divided between the licensed seller and another licensed seller, person
furnishing transient accommodations, or person rendering an amusement for
imposition of the tax under chapter 237;
(E) The gross income of the licensed seller
is not subject to a deduction under this chapter; and
(F) The resale of the service, tangible
personal property, or amusement is subject to the tax imposed under this
chapter at the highest rate.
As used in this paragraph, "amusement"
means entertainment provided as part of a show for which there is an admission
charge; and
(14) Sales by a printer to a publisher of magazines or
similar printed materials containing advertisements, when the publisher is
under contract with the advertisers to distribute a minimum number of magazines
or similar printed materials to the public or defined segment of the public,
whether or not there is a charge to the persons who actually receive the
magazines or similar printed materials.
(b) If the use tax law is finally held by a
court of competent jurisdiction to be unconstitutional or invalid insofar as it
purports to tax the use or consumption of tangible personal property imported
into the State in interstate or foreign commerce or both, wholesalers and
jobbers shall be taxed thereafter under this chapter in accordance with the
following definition (which shall supersede the preceding paragraph otherwise
defining "wholesaler" or "jobber"): "Wholesaler"
or "jobber" means a person, or a definitely organized division
thereof, definitely organized to render and rendering a general distribution
service that buys and maintains at the person's place of business a stock or
lines of merchandise that the person distributes; and that the person, through
salespersons, advertising, or sales promotion devices, sells to licensed
retailers, to institutional or licensed commercial or industrial users, in
wholesale quantities and at wholesale rates. A corporation deemed not to be
carrying on a trade or business in this State under section 235-6 shall
nevertheless be deemed to be a wholesaler and shall be subject to the tax
imposed by this chapter.