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Hawaii Amazon Tax Proposed … Again


 Will Hawaii enact online sales tax legislation in 2014?

Hawaii is once again jumping into the fray of online sales tax. Attempts by both the Hawaii House and Senate in 2013 to apply sales tax to out-of-state sellers with in-state affiliates met with initial approval but were carried over to the 2014 Regular Session. Now State Representative Isaac Choy has taken up the torch with Hawaii House Bill 1651, introduced earlier this month.

The bill seeks to require:

 “the collection of use taxes by sellers of tangible personal property who enter into agreements under which a person in the State refers potential purchasers to the seller, including by an internet link or web site, or performs related services in the State on behalf of the seller.”

Such sellers will only be liable for the tax if:

  • “The total cumulative sales price from all of the seller’s sales, within the preceding twelve months, of tangible personal property to purchasers in the State that are referred pursuant to all of those agreements with a person or persons in the State, is in excess of $10,000; and
  • The seller, within the preceding twelve months, has total cumulative sales of tangible personal property to purchasers in the State in excess of $10,000."

The Hawaii bill is currently pending action in the House Judiciary Committee.

The Marketplace Fairness Act

If lawmakers in Hawaii are pushing for an online sales tax, they are also looking to the federal government for a solution. The summary of HB 1651 explains that the approved bill would take effect unless preempted by federal law. The Marketplace Fairness Act of 2013—federal legislation that would grant states the right to impose sales tax on certain remote retailers, provided the states simplified sales tax—was approved by the United States Senate in May 2013. No further action has been taken to date.

Is your business prepared for the kind of sales tax changes proposed by Hawaii House Bill 1651?

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.