SALT Report 1347 – The Hawaii House of Representatives has pre-filed a bill that includes use tax click-through nexus and affiliate nexus provisions. Under H.B. 1694, a person “engaged in business in the state” would now be considered a “seller” and that would include any entity affiliated with the seller, that has established substantial nexus with Hawaii and upon whom federal law permits the state to impose taxes.
A seller engaged in business in Hawaii would include any seller that has entered into an agreement with a person in Hawaii, for a commission or other consideration, and directly or indirectly refers potential customers to the seller, either through an Internet link or an Internet Web site, or otherwise, provided that:
- The total cumulative sales price from all of the seller’s sales within the preceding 12 months to purchasers in Hawaii that were referred pursuant to an agreement with a person in the state are in excess of $10,000; and
- The seller, within the preceding 12 months, has total cumulative sales of tangible personal property to purchasers in Hawaii in excess of $1 million