Haw. Rev. Stat. » Haw. Rev. Stat. / Chapter 238
Hawaii Revised Statutes

Haw. Rev. Stat. § 238-2 (2026)

  Imposition of tax on tangible personal property; exemptions

✓ current as of July 2026
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     §238-2  Imposition of tax on tangible personal property; exemptions.  There is hereby levied an excise tax on the use in this State of tangible personal property which is imported by a taxpayer in this State whether owned, purchased from an unlicensed seller, or however acquired for use in this State.  The tax imposed by this chapter shall accrue when the property is acquired by the importer or purchaser and becomes subject to the taxing jurisdiction of the State.  The rates of the tax hereby imposed and the exemptions thereof are as follows:

     (1)  If the importer or purchaser is licensed under chapter 237 and is:

          (A)  A wholesaler or jobber importing or purchasing for purposes of sale or resale; or

          (B)  A manufacturer importing or purchasing material or commodities which are to be incorporated by the manufacturer into a finished or saleable product (including the container or package in which the product is contained) wherein it will remain in such form as to be perceptible to the senses, and which finished or saleable product is to be sold in such manner as to result in a further tax on the activity of the manufacturer as the manufacturer or as a wholesaler, and not as a retailer,

          there shall be no tax; provided that if the wholesaler, jobber, or manufacturer is also engaged in business as a retailer (so classed under chapter 237), paragraph (2) shall apply to the wholesaler, jobber, or manufacturer, but the director of taxation shall refund to the wholesaler, jobber, or manufacturer, in the manner provided under section 231-23(c) such amount of tax as the wholesaler, jobber, or manufacturer shall, to the satisfaction of the director, establish to have been paid by the wholesaler, jobber, or manufacturer to the director with respect to property which has been used by the wholesaler, jobber, or manufacturer for the purposes stated in this paragraph;

     (2)  If the importer or purchaser is licensed under chapter 237 and is:

          (A)  A retailer or other person importing or purchasing for purposes of sale or resale, not exempted by paragraph (1);

          (B)  A manufacturer importing or purchasing material or commodities which are to be incorporated by the manufacturer into a finished or saleable product (including the container or package in which the product is contained) wherein it will remain in such form as to be perceptible to the senses, and which finished or saleable product is to be sold at retail in this State, in such manner as to result in a further tax on the activity of the manufacturer in selling such products at retail;

          (C)  A contractor importing or purchasing material or commodities which are to be incorporated by the contractor into the finished work or project required by the contract and which will remain in such finished work or project in such form as to be perceptible to the senses;

          (D)  A person engaged in a service business or calling as defined in section 237-7, or a person furnishing transient accommodations subject to the tax imposed by section 237D-2, in which the import or purchase of tangible personal property would have qualified as a sale at wholesale as defined in section 237-4(a)(8) had the seller of the property been subject to the tax in chapter 237; or

          (E)  A publisher of magazines or similar printed materials containing advertisements, when the publisher is under contract with the advertisers to distribute a minimum number of magazines or similar printed materials to the public or defined segment of the public, whether or not there is a charge to the persons who actually receive the magazines or similar printed materials,

          the tax shall be one-half of one per cent of the purchase price of the property, if the purchase and sale are consummated in Hawaii; or, if there is no purchase price applicable thereto, or if the purchase or sale is consummated outside of Hawaii, then one-half of one per cent of the value of such property; and

     (3)  In all other cases, four per cent of the value of the property.

     For purposes of this section, tangible personal property is property that is imported by the taxpayer for use in this State, notwithstanding the fact that title to the property, or the risk of loss to the property, passes to the purchaser of the property at a location outside this State. [L 1965, c 155, pt of §2; Supp, §119-2; HRS §238-2; gen ch 1985; am L 1999, c 71, §8; am L 2000, c 198, §8 and c 271, §2; am L 2004, c 114, §3]

 

Attorney General Opinions

 

  General excise and use taxes may be applied to imported goods, no longer in transit, regardless of whether imported goods are in their original packages.  Att. Gen. Op. 94-2.

 

Case Notes

 

  Calculation of purchase price and freight charges held to be fair reflection of value of imported equipment.  56 H. 621, 547 P.2d 2 (1976).

  Freight charges may be properly included in determining "value", the use tax base; such inclusion does not impose burden on interstate commerce.  56 H. 621, 547 P.2d 2 (1976).

  Parts imported by taxpayer and used in its repair and maintenance work did not, under the record, constitute goods imported for resale.  58 H. 163, 566 P.2d 1091 (1977).

  Where appellant argued that use tax imposed on its imported food products pursuant to chapter 238 violated commerce clause, appellant was treated equally with similarly situated taxpayers.  76 H. 1, 868 P.2d 419 (1994).

  Under the plain language of §238-1, Delaware corporation was not subject to the use tax where the sale of books was directly from the corporation to the state library; the corporation did not import the books from an unlicensed seller, nor did it purchase the books and "resell" the goods to the library and thus could not have imported from itself or purchased from itself.  103 H. 359, 82 P.3d 804 (2004).

     Where plaintiff: (1) caused consumer electronic goods from various mainland vendors to be shipped to Hawaii in order to restock plaintiff's retail stores in this State, constituting importation of goods into the State for purposes of resale; and (2) used the goods in Hawaii by "keeping the property" in this State "for sale", plaintiff was subject to assessment of the use tax under this section.  128 H. 116, 284 P.3d 209 (2012).

     Where plaintiff was a "retailer" licensed under chapter 237, used the goods in Hawaii after it purchased and imported them from the mainland "for purposes of resale", it was liable for the use tax under this section.  128 H. 116, 284 P.3d 209 (2012).

 

 

Notes of Decisions
Cited in 10 cases (1 in the last 5 years), 1972–2025 · leading case: CompUSA Stores, L.P. v. State., 418 P.3d 645 (Haw. 2018).
Sort: Relevance Newest Treatment
CompUSA Stores, L.P. v. State., 418 P.3d 645 (Haw. 2018). · cites it 90× “In 2004, the legislature amended the use tax statute, HRS § 238-2. CompUSA argues that the 2004 amendment to the statute rendered the statute unconstitutional because the amendment eliminated the application of the tax to in-state unlicensed sellers, thereby limiting the tax to…”
In re the Tax Appeal of Otis Elevator Co., 566 P.2d 1091 (Haw. 1977). · cites it 39× “In this respect HRS § 238-2(2) (A) states: §238-2 Imposition of tax; exemptions. There is hereby levied an excise tax on the use in this State of tangible personal property which is imported, or purchased from an unlicensed seller, for use in this State.”
Tax Appeal of Baker & Taylor, Inc. v. Kawafuchi, 82 P.3d 804 (Haw. 2004). · cites it 14× “It also took the position that, based on HRS § 238-2, Baker was liable for use taxes of 0.”
In Re the Tax Appeal of Hawaiian Flour Mills, Inc., 868 P.2d 419 (Haw. 1994). · cites it 4× “Accordingly, on the record before it, the circuit court erred in quantifying the refund to which HFM was entitled by way of summary judgment.”
In Re Tax Appeal of Fuji Photo Film Hawaii, Inc., 904 P.2d 517 (Haw. 1995). · cites it 12× “HRS § 238-2 provides in pertinent part: [t]here is hereby levied an excise tax on the use in this State of tangible personal property which is imported, or purchased from an unlicensed seller, for use in this State.”
Matter of Puna Sugar Co., Ltd., 547 P.2d 2 (Haw. 1976). · cites it 6× “Article 6(a) of the Rules and Regulations of the Director of Taxation Relating to the Use Tax Law under Chapter 238, HRS, provides that: "`Value' means fair and reasonable cash value at the time of accrual of the tax which should include freight, insurance, handling charges less…”
Compusa Stores, LP v. Dep't of Taxation, State of Hawaii., 284 P.3d 209 (Haw. 2011). · cites it 69× “The tax appeal court granted the Department’s motion and denied Com-pUSA’s motion, holding that Baker & Taylor was distinguishable and that the use tax applied to CompUSA. The court entered a judgment against CompUSA in the amount of $1,705,337.”
In Re the Tax Appeal of Habilitat, Inc., 649 P.2d 1126 (Haw. 1982). · cites it 6× “HRS § 238-2 imposes a levy “on the use in this State of tangible personal property which is imported, or purchased from an unlicensed seller, for use in this State.”
In re the Tax Appeal of Alexander & Baldwin, Inc., 497 P.2d 37 (Haw. 1972). · cites it 6× “] HRS § 238-2 subjects tangible personal property imported from an unlicensed seller by ¿ wholesaler, who is also licensed under HRS ch.”
In re: Tax Appeal of Hawaiian Airlines, Inc. v. Dep't of Taxation (Haw. App. 2025). · cites it 8× “15 FOR PUBLICATION IN WEST'S HAWAI#I REPORTS AND PACIFIC REPORTER As relevant here, HRS § 238-2 (2017) provides: There is hereby levied an excise tax on the use in this State of tangible personal property which is imported by a taxpayer in this State .”
— Haw. Rev. Stat. § 238-2(1) — 1 case
In Re the Tax Appeal of Habilitat, Inc., 649 P.2d 1126 (Haw. 1982). “HRS § 238-2 imposes a levy “on the use in this State of tangible personal property which is imported, or purchased from an unlicensed seller, for use in this State.”
— Haw. Rev. Stat. § 238-2(1)(A) — 1 case
In Re Tax Appeal of Fuji Photo Film Hawaii, Inc., 904 P.2d 517 (Haw. 1995). “HRS § 238-2 provides in pertinent part: [t]here is hereby levied an excise tax on the use in this State of tangible personal property which is imported, or purchased from an unlicensed seller, for use in this State.”
— Haw. Rev. Stat. § 238-2(2) — 2 cases
In re the Tax Appeal of Otis Elevator Co., 566 P.2d 1091 (Haw. 1977). “In this respect HRS § 238-2(2) (A) states: §238-2 Imposition of tax; exemptions. There is hereby levied an excise tax on the use in this State of tangible personal property which is imported, or purchased from an unlicensed seller, for use in this State.”
Tax Appeal of Baker & Taylor, Inc. v. Kawafuchi, 82 P.3d 804 (Haw. 2004). “It also took the position that, based on HRS § 238-2, Baker was liable for use taxes of 0.”
— Haw. Rev. Stat. § 238-2(2)(A) — 1 case
Compusa Stores, LP v. Dep't of Taxation, State of Hawaii., 284 P.3d 209 (Haw. 2011). “The tax appeal court granted the Department’s motion and denied Com-pUSA’s motion, holding that Baker & Taylor was distinguishable and that the use tax applied to CompUSA. The court entered a judgment against CompUSA in the amount of $1,705,337.”
— Haw. Rev. Stat. § 238-2(2)(B) — 1 case
In Re Tax Appeal of Fuji Photo Film Hawaii, Inc., 904 P.2d 517 (Haw. 1995). “HRS § 238-2 provides in pertinent part: [t]here is hereby levied an excise tax on the use in this State of tangible personal property which is imported, or purchased from an unlicensed seller, for use in this State.”
— Haw. Rev. Stat. § 238-2(3) — 4 cases
In re the Tax Appeal of Otis Elevator Co., 566 P.2d 1091 (Haw. 1977). “In this respect HRS § 238-2(2) (A) states: §238-2 Imposition of tax; exemptions. There is hereby levied an excise tax on the use in this State of tangible personal property which is imported, or purchased from an unlicensed seller, for use in this State.”
Matter of Puna Sugar Co., Ltd., 547 P.2d 2 (Haw. 1976). “Article 6(a) of the Rules and Regulations of the Director of Taxation Relating to the Use Tax Law under Chapter 238, HRS, provides that: "`Value' means fair and reasonable cash value at the time of accrual of the tax which should include freight, insurance, handling charges less…”
In Re Tax Appeal of Fuji Photo Film Hawaii, Inc., 904 P.2d 517 (Haw. 1995). “HRS § 238-2 provides in pertinent part: [t]here is hereby levied an excise tax on the use in this State of tangible personal property which is imported, or purchased from an unlicensed seller, for use in this State.”
In re the Tax Appeal of Alexander & Baldwin, Inc., 497 P.2d 37 (Haw. 1972). “] HRS § 238-2 subjects tangible personal property imported from an unlicensed seller by ¿ wholesaler, who is also licensed under HRS ch.”
— Haw. Rev. Stat. § 238-2(l)(A) — 1 case
In Re Tax Appeal of Fuji Photo Film Hawaii, Inc., 904 P.2d 517 (Haw. 1995). “HRS § 238-2 provides in pertinent part: [t]here is hereby levied an excise tax on the use in this State of tangible personal property which is imported, or purchased from an unlicensed seller, for use in this State.”
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