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Kokua Line

By June Watanabe

Sunday, June 16, 2002


State law does not require
passing on of use taxes


Question: I am concerned that Apple Computer may be overbilling residents of Hawaii. I was charged $49 for speaking to an Apple technician over the phone for a problem with my computer. I did not purchase any goods.

The invoice I received showed $49 for the service, plus a 21-cent "Hawaiian impost" charge, plus $2.05 tax, which I assume is the excise tax.

In several discussions with Apple representatives over a two-month period, I was able to learn that in 1998 or 1999, their auditors ordered that this impost be applied. One representative read me the memo, and from that it appeared it was a wholesale tax, although I am not an authorized Apple dealer nor a wholesaler or retailer.

When I asked for a copy, I was informed it was "proprietary information." I was told that I was charged the impost in error and that it would be refunded. That did not happen, and I had to start with another representative. The problem was finally corrected.

The 21 cents didn't matter to me, but I want to know, what is the Hawaiian impost, and is it legal? If it is a wholesale tax, is it legal to charge both the wholesale and excise tax on an item? Is a refund due all customers who have had the impost applied?

Answer: The state Department of Taxation said it couldn't pass judgment on your case without having more details.

However, Hawaii does not have a "Hawaiian impost" charge and never has, according to department spokeswoman Annette Yamanuha.

We pointed out that we saw the term used by the University of Hawaii Bookstore on its Web site in regards to Apple purchases, and Yamanuha said a bookstore official "indicated" it was a term used by Apple.

She said the charge appeared to be a "pass on" of the Hawaii use tax, which Apple confirmed.

Apple, which didn't want to discuss the matter, said simply that its use of the term "Hawaiian impost" is "based on the Hawaii use tax."

An example of a "pass on" of the use tax, Yamanuha said, is if Company A, which does business in Hawaii, imports or purchases services for use in Hawaii, but the services are performed outside Hawaii by Company B, which is not subject to Hawaii's general excise tax.

Generally, Company A would be subject to the use tax on the value of the imported/purchased services.

However, Yamanuha said passing on the use tax is not required by Hawaii's use tax law and would be a contractual matter between Company A and its customers. She noted that whatever taxes Company A owes would be factored into prices it charges customers, but "tax law does not require the use tax due on a transaction to be separately billed," she said. "It only requires Company A to pay the appropriate amount."

If the price, including any taxes passed on to the customer, is more than the agreed-upon price, Yamanuha said, then the customer may have grounds to file a complaint with the state Office of Consumer Protection (586-2636), which handles such disputes.

However, she said that without knowing all the facts and circumstances, the department is not able to determine if both the use tax and general excise tax are being passed on to the customer for the same service transaction.

She suggested you contact "the appropriate level of management" at Apple for information, or suggest to whoever you contact that the company request a letter ruling from the Tax Department on the applicability of assessing the use tax on its service transactions.

Q: Can you reassure me that the CrimeStoppers program has no caller identifying equipment and that they won't know who is calling unless the callers voluntarily identify themselves? People tell me there is no caller identifying equipment, but somehow I don't believe it.

A: There is no caller ID on the CrimeStoppers hot line (955-8300).

One of the pillars of CrimeStoppers is anonymity, explained Detective Letha DeCaires, the Honolulu Police Department's coordinator of the successful nonprofit program that seeks the public's help in tracking criminals, from petty thieves to murderers.

However, to say that if, for some compelling reason, police wanted to trace a call that they could not "would not be true," she said. "Anyone who watches Hollywood movies knows there's a way to move through anything if you've got enough money, time and technology."

But the idea behind CrimeStoppers is to have "a program that says no caller ID, no identity (required)," DeCaires said. "There is no caller ID on our phone system."

You can find information on CrimeStoppers by going on the Internet at www.crimestoppers-honolulu.org.

Auwe

There are several taggers that intend to leave their mark on as many buildings and walls as possible in Palolo/Kaimuki. Specifically to "Rosco" and "Robinicole," did your parents teach you nothing of respect for your environment? If you want everyone to know your names, why not spray paint it across your foreheads? Come on, good folks of Palolo/Kaimuki, this is your kuleana. If you know the people responsible, that information should be turned in to the proper authority. -- Concerned in Kaimuki





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