Section 237-18(f), HRS, allows a "travel agency" or "tour packager" and the provider of "tourism related services" to divide or split their gross income received. Each person pays the four percent general excise tax (GET) only on their respective portions of their income. Written Opinion No. 99-001 states that to the extent that a destination management company packages "tourism related services" and does not function as a direct service provider, the destination management company is a "tour packager" under section 237-13(f), HRS. Amounts paid by the destination management company for "tourism related services" qualify for the division of income under section 237-18(f), HRS.
Section 237-44(d), HRS, specifies that whenever a transient taxpayer is engaged in business at any place for which admissions are charged or any cabaret whether or not admissions are charged, the person engaging the transient taxpayer shall collect the general excise tax from the transient taxpayer. Written Opinion No. 99-001 states that the withholding requirement is not applicable to a destination management company operating as such.
Written Opinion No. 99-001, which is attached to this Announcment, is issued pursuant to section 231-19.5, HRS. The opinion is based on the Department's understanding of the facts as presented and under applicable law and rules as of the date of issuance. If it is later determined that our understanding of the facts is incorrect, incomplete, or inaccurate in any material respect, the opinion shall be modified accordingly. This opinion also may be subject to change due to future amendments to laws, rules, or official Department positions. Moreover, other taxpayers may not rely upon the conclusions in Written Opinion No. 99-001.
Forms and other tax information may be downloaded from the Department's website at http://www.state.hi.us/tax/tax.html. On Oahu, forms may be ordered by calling the Department's Forms Request Line at 587-7572. Persons who are not calling from Oahu may call 1-800-222-7572 to receive forms by mail or 808-678-0522 from a fax machine to receive forms by fax.
RAY K. KAMIKAWA
Director of Taxation
Attachment: Written Opinion 99-001