§237-2 "Business", "engaging"
in business, defined. As used in this chapter:
"Business" includes all activities
(personal, professional, or corporate) engaged in or caused to be engaged in
with the object of gain or economic benefit either direct or indirect, but does
not include casual sales.
"Engaging", with reference to engaging
or continuing in business, includes the exercise of corporate or franchise
powers. [L 1935, c 141, pt of §1; RL 1945, §5443; RL 1955, §117-2; HRS §237-2;
am L 2017, c 12, §49]
Attorney General Opinions
Agreement of sale executed by a partnership dealing in land
was not a "casual sale". Att. Gen. Op. 62-1.
Co-op apartment corporation operating and managing apartment
building is engaged in business and is taxable on its receipts of monthly "maintenance"
charges from stockholder-lessees. Att. Gen. Op. 62-47.
Application of excise tax to activities in foreign trade
zone. Att. Gen. Op. 64-52.
Hawaii's general excise tax and use tax are not expressly
preempted by the federal Foreign-Trade Zones Act of 1934, and Congress has not
assumed exclusive regulatory powers in foreign-trade zones such that the State
is preempted from imposing taxes on all activity within a foreign-trade zone.
Ultimately, whether a state tax can be applied to a particular activity within
a foreign-trade zone depends on whether the tax conflicts with the purposes and
objectives of the federal Act. Att. Gen. Op. 21-01.
Case Notes
"Casual sale" does not exclude unusual sales within
taxpayer's business. 40 H. 722 (1955).
Attorney's activities as trustee, executor and corporate
director were not so isolated or unconnected as to constitute "casual"
transactions. 53 H. 435, 496 P.2d 1 (1972).
Engaging in activity with "object of gain or economic
benefit" construed. 53 H. 435, 496 P.2d 1 (1972).
Out-of-state company's continuing leasing of telecast rights
performable only in Hawaii is "business" within this section,
although agreement consummated outside of Hawaii. 57 H. 175, 554 P.2d 242
(1976).
Nondomiciliary corporation investing capital in Hawaiian land
held to be "engaging in business." 57 H. 436, 559 P.2d 264 (1977).
Taxability of transactions between joint venture and its
member. 59 H. 307, 582 P.2d 703 (1978).
Where taxpayer gained or economically benefited from
subleasing transactions, the director's assessment and imposition of the
general excise tax for taxpayer's subleasing activities was proper. 110 H. 25,
129 P.3d 528 (2006).
Taxpayer partnership's provision of medical equipment and
ancillary services to its joint venture constituted "business" under
this section and was thus made subject to the general excise tax by §237-20.
93 H. 267 (App.), 999 P.2d 865 (2000).
Cited: 48 H. 486, 490, 405 P.2d 382 (1965).
Notes of Decisions
Tax Appeal of Subway Real Est. Corp. v. Dir. of Taxation, 129 P.3d 528 (Haw. 2006).
· cites it 22× “(Taxpayer) was proper inasmuch as (a) Taxpayer gained or economically benefitted under HRS § 237-2 from said activities, and (b) the substanee-over-form doctrine enunciated in In re Tax Appeal of Hawaiian Tel.”
Tax Appeal of Baker & Taylor, Inc. v. Kawafuchi, 82 P.3d 804 (Haw. 2004).
· cites it 6× “) HRS § 237-2 (1993) provides that the tenn “business” includes “all activities (personal, professional, or corporate), engaged in or caused to be engaged in with the object of gain or economic benefit either direct or indirect, but does not include casual sales.”
In Re the Tax Appeal of Grayco Land Escrow, Ltd., 559 P.2d 264 (Haw. 1977).
· cites it 3× ““Business” as used in this chapter, includes all activities (personal, professional, or corporate), engaged in or caused to be engaged in with the object of gain or economic benefit either direct or indirect, but does not include casual sales.”
In re the Tax Appeal of Brewer & Co., 649 P.2d 1155 (Haw. 1982).
· cites it 4× “A legislative design to reach virtually all transactions with economic gain or benefit as the object may also be observed in HRS § 237-2, reading: “Business” as used in this chapter, includes all activities (personal, professional, or corporate), engaged in or caused to be…”
In Re the Tax Appeal of Island Holidays, Ltd., 582 P.2d 703 (Haw. 1978).
· cites it 3× ““Business” is defined by HRS § 237-2 as including “all activities (personal, professional, or corporate), engaged in or caused to be engaged in with the object of gain or economic benefit either difect or indirect,” with the exclusion only of casual sales.”
City & Cnty. of Honolulu v. Kam, 402 P.2d 683 (Haw. 1965).
· cites it 2× “*360 1955, § 237-2, that: “No garnishee shall be liable to anyone for the nonpayment of any sum or for the nondelivery of any goods or effects when such garnishee in good faith believes, or has reason to believe, that garnishment or other process affects the same, though such be…”
Collector of Rev. v. Wells Fargo Leasing Corp., 393 So. 2d 1244 (La. 1981).
“This continuing leasing of the telecast rights performable only in Hawaii for a rental charge, we believe, is the type of activity contemplated in the definition of `Business' given in HRS § 237-2." 554 P.2d at 246-47 . See also, J.”
In re the Tax Appeal of Trade Wind Tours of Hawaii, Inc., 718 P.2d 1122 (Haw. App. 1986).
· cites it 2× “We do not believe a contrary decision would have resulted in Brewer if “less than wholly owned” subsidiaries had not been involved and the parent had rendered services only to its wholly owned subsidiaries.”
Pratt v. Kondo, 496 P.2d 1 (Haw. 1972).
· cites it 2× “” We think the Director has shown a pattern of conduct which constitutes an “engaging or continuing”: The term “engaging”, as defined in HRS § 237-2, “includes all activities . .”
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