Kokua Line

By Gregg K. Kakesako

Tuesday, July 16, 1996

Hildegaard Verploegen is on vacation

ANSWER: Yes, says state Tax Director Ray Kamikawa.

The idea here is try to "level the playing field" for island merchants and retailers who have to compete with mainland mail-order firms.

The use tax is one-half of 1 percent for those who import goods for resale at retail in Hawaii and 4 percent for all other use.

Last fall, the Tax Department printed a fact sheet on the use tax issue, part of which is reprinted here.

Hawaii residents probably aren't aware that they have to pay the state 4 percent use tax for "imported" items when purchased from out-of-state sellers through mail-order catalogs who aren't licensed to do business in Hawaii.

For the ease of administration and convenience to the customers, states prefer that mail-order companies collect and pay the use tax for their customers.

If the mail-order company does not collect and pay the tax, the purchaser is responsible for paying the use tax to the state.

If you paid the sales tax of another state, it could be taken as a credit to offset Hawaii's use tax.

If the sales tax paid to the other state was equal to or more than Hawaii's 4 percent use tax, you do not have to report or pay a use tax on those items.

Individual and nonbusiness taxpayers can use state tax form G-28 (Use Tax Return-Imports for Consumption), which can be ordered by calling 587-7572 or 1-800-222-7572.

The use tax payment is due a month after the purchased item is brought into the state.

Problems relating to use tax collections are not unique to Hawaii.

They are experienced by all states which impose a use tax.

For this reason, legislation has been introduced in Congress that would require all mail-order companies to collect the tax for the states.

For more information, call 587-4242 and ask for a brochure titled "Introduction to the Use Tax."

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