Hawaii ~ Sales and Use Tax: Certain Mobile Telecommunications Services Remain Exempt During Temporary Suspension of Exemptions

A Hawaii Department of Taxation release clarifies that gross receipts of Hawaii mobile telecommunications service providers acting as serving carriers providing interstate or foreign mobile telecommunications services to non-Hawaii home service providers remain exempt from general excise tax during the period that numerous exemptions are temporarily suspended. As previously reported, Act 105 (S.B. 754), Laws 2011, suspends numerous general excise and use tax exemptions for two years and subjects the previously exempt amounts to a 4% general excise and use tax from July 1, 2011, to June 30, 2013. (TAXDAY, 2011/06/16, S.9) Act 105 temporarily suspends a statutory provision for home service providers acting as service carriers providing mobile telecommunications services to other home service providers. However, the Hawaii exemption merely codifies an exemption under the federal Mobile Telecommunications Sourcing Act, 4 U.S.C. §§116 et seq. (MTSA). Therefore, the suspension of the exemption under Act 105 does not apply to the services that are exempt under the MTSA.

Tax Information Release No. 2011-03, Hawaii Department of Taxation, July 19, 2011

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