Hawaii Legislation

Last Updated on November 4, 2019

Hawaii has released guidance on the expanded imposition of general excise tax (GET) on sales made through marketplace facilitators under Act 2, Session Laws of Hawaii 2019 (Act 2). As previously reported, Act 2 will become effective on January 1, 2020.

Act 2 defines “marketplace facilitator” as any person who sells or assists in the sale of tangible personal property, intangible personal property, or services on behalf of another by providing a forum for the listing or advertisement of the item and by collecting payment from the purchaser, either directly or indirectly. “Marketplace facilitator” means a website, application, or platform of any type and includes, but is not limited to, the following business models:

• educational service websites or applications, such as those that host third-party educational content and connect customers to that content;
• food delivery service marketplaces, such as those that offer delivery of food to customers;
• transportation network companies, such as those that connect customers to providers of motor vehicle transportation;
• in-person service and task-based service platforms, such as those that connect customers to service providers able to perform tasks or services for those customers;
• remote service marketplaces, such as those that connect customers with service providers that provide computer programming services or other services that can be provided remotely;
• remote intangible property or data access marketplaces, such as those that provide customers access to third-party data stores, other intangible property, or computing power;
• brick and mortar marketplaces of any type, including those listed above; and
• travel agents and tour packagers that have engaged in activities relating to the furnishing of tourism related services that go beyond merely arranging for the furnishing of the service. There are some exclusions.

If they have not already done so, all marketplace facilitators and marketplace sellers engaged in business in Hawaii must register for GET licenses prior January 1, 2020, or prior to starting business activities, whichever is later. Marketplace facilitators and marketplace sellers that do not have a physical presence are deemed engaged in business in Hawaii if the taxpayer has gross income sourced to Hawaii of $100,000 or more or has 200 or more transactions with parties in Hawaii.