HRS § 237-41.5 — Certain amounts held in trust; liability of key individuals


§237-41.5 Certain amounts held in trust;
liability of key individuals. (a) There shall be personal liability for
the taxes imposed under this chapter as provided in this section for the
following amounts of gross income or gross proceeds:
(1) Any amount collected as a recovery of the
taxpayer's liability under this chapter, where the amount is passed on as the
tax owed by the taxpayer under this chapter for the transaction and is
separately stated or accounted for in a receipt, contract, invoice, billing, or
other evidence of the business activity; or
(2) An amount equal to the tax liability under this
chapter on a transaction where a taxpayer does not separately state or account
for the amount as a tax recovery as provided in paragraph (1). For purposes of
this paragraph, the amount of the imputed tax liability is the result of
multiplying the gross income or gross proceeds received in the transaction by
the tax rate.
The amounts under paragraphs (1) and (2) shall be
held in trust for the benefit of the State and for payment to the State in the
manner and at the time required by this chapter.
(b) The personal liability under this section
applies to any officer, member, manager, or other person having control or
supervision over amounts of gross proceeds or gross income collected to pay the
general excise tax and held in trust under subsection (a), or who is charged
with the responsibility for the filing of returns or the payment of general
excise tax on gross income or gross proceeds collected and held in trust under
subsection (a). The person shall be personally liable for any unpaid taxes and
interest and penalties on those taxes, if such officer or other person wilfully
fails to pay or to cause to be paid any taxes due from the taxpayer pursuant to
this chapter.
This subsection shall not apply to any officer,
manager, or other person having control or supervision over amounts of gross
proceeds or gross income collected to pay the general excise tax and held in
trust under subsection (a), or who is charged with the responsibility for the
filing of returns or the payment of general excise tax on gross income or gross
proceeds collected and held in trust under subsection (a) for a nonprofit
organization.
For purposes of this subsection:
"Nonprofit organization" means a
corporate entity, association, or other duly chartered entity that is registered
with the State and is exempt from the application of this chapter pursuant to
section 237-23(a)(3), (4), (5), (6), or (7).
"Wilfully fails to pay or to cause to be
paid" shall be construed in accordance with judicial interpretations given
to similar provisions of the Internal Revenue Code; consistent therewith, the
term "wilfully" shall mean a voluntary, intentional violation of a
known legal duty.
(c) An officer, member, manager, or other
responsible person shall be liable only for general excise taxes on gross
income or gross proceeds collected, plus interest and penalties on those taxes,
that became due during the period the person had control, supervision,
responsibility, or a duty to act for the taxpayer as described in subsection
(b) of this section.
(d) Persons liable under subsection (b) are
exempt from liability when nonpayment of the general excise tax on gross income
or gross proceeds held in trust is for good cause as determined by the
director.
(e) The voluntary or involuntary dissolution
of the taxpayer or the withdrawal or surrender of its right to engage in
business in this State shall not discharge the liability hereby imposed.