Well, turns out HB1405 Hawaii’s original stand alone version of the Internet Tax has passed the House. A joint committee had been working to resolve some differences between House and Senate on 1405 and the committee reached agreement. Bill was sent to House and it passed. It is now on to the Senate. The original version passed in Senate so I believe the new version will also pass. It is scheduled for vote tomorrow, May 7.
Here is an excerpt from the bill:
(2) (A) The sale of tangible personal property by a person soliciting business through an independent
contractor or other representative if the person enters into an agreement with a resident of this
state under which the resident, for a commission or other consideration, directly or indirectly
refers potential customers, whether by a link on an Internet website or otherwise, to the person,
and if the cumulative gross receipts from sales by the person to customers in the state who are
referred to the person by such a resident, is at least $10,000 in the twelve-month period ending
on the last day of the most recent calendar quarter before the calendar quarter in which the
sale is made.
(B) This presumption may be rebutted by proof that the resident with whom the person has an
agreement did not engage in any solicitation in the state on behalf of the person that would
satisfy the nexus requirement of the United States Constitution during twelve-month period in
question. Nothing in this section shall be construed to narrow the scope of the terms
“person,” “purchasing agent,” or “representative” as defined in section 237-1.”
Link to HB1405
Sb1678, has also passed in the House and is due for vote in the Senate tomorrow, May 7. So Hawaii has taken several steps towards Internet Tax. I guess we will see if merchants who threatened to remove affiliates upon passage of an Internet tax will follow through. I think it is time to take proactive steps and inform merchants that there is opportunity to rebut the presumption of nexus.