Hawaii – Use Tax on Imported Contracting

SALT Report 2423 – The Hawaii State Legislature passed a bill that amends the laws regarding the imposition of use tax on imported contracting and services. Under the provisions of SB 1190, use tax will not be imposed if the importer or purchaser has a general excise tax license and is a contractor importing or purchasing contracting services that will become “identifiable elements, excluding overhead, of the finished work or project required under the contract.”

To qualify for the exemption:

  • The gross proceeds derived by the contractor must be subject to general excise tax, and
  • The contractor could deducted the amounts paid to the subcontractor if the subcontractor were subject to the general excise tax

Additionally, the term “use” has been amended to reflect that it does not include the “use of contracting imported or purchased by a licensed contractor who is engaged in business as a contractor and subject to the use tax.”

The provisions in this Bill are effective July 1, 2013.

For Further Information

Hawaii State Legislature – Senate Bill 1190, Laws 2013