@083 CHAP ZZ @CODE: HI 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � GENERAL EXCISE TAX (HAWAII) � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� Unlike most states, Hawaii does not have a general sales tax, as such. Instead, it has a General Excise (or gross income) Tax (GET), which is one of the most pervasive taxes levied by any state government in the U.S. It is much like a general sales tax, except that it is in many ways much broader than the typical sales tax, in that it applies to all types of services, real estate rentals, and other types of income as well as to the sale of tangible goods. The GET is an excise tax for the privilege of engaging in business within the state of Hawaii, and is based on the value of products, gross proceeds of sales, or gross in- come. As such, it is applicable to virtually all kinds of business income, but there are a number of exemptions, including wages and salaries. The tax, which applies at a uniform rate throughout the state, is generally imposed at a rate of 4%. As of 1993, counties may be permitted to impose an additional 0.5% tax for mass transit funding, on transactions subject to the 4% state wide general excise (or use) tax. The GET tax rate is reduced to 0.5% on many transactions, such as wholesale transactions made for resale (if the sel- ler obtains a resale certificate from a licensed retailer), intermediate services, manufacturing, producing, canning, and for certain other types of taxpayers. A special tax rate of 0.15% applies to insurance solicitors' income. Businesses must register with the Dept. of Taxation on Form GEW-TA-RV-3, which is also used to obtain an employer's withholding number and a transient accommodations tax num- ber. A $20 fee must be paid to register, and you must renew the license by January 31 each year. A complementary "use tax" applies to certain transactions to which the GET does not apply, such as on tangible prop- erty bought outside of Hawaii and imported into the state. The use tax on such items is usually 4%, except that the lower 0.5% rate applies to items that are imported for purposes of resale. Use tax exemptions include newspapers and other periodicals, items imported for temporary use within the state, and autos imported for personal use (if used first while a resident of another state). Not all gross receipts are subject to the GET or related use tax. Exemptions to the GET include: . Sales of land or securities; . Wages, salaries; . Various state excise taxes, such as Transient Accommodations Tax (no tax on tax, except for GET itself); . Sales of tangible personal property to the federal government; . Income of banks or S & L's which are subject to the tax on financial institutions (the franchise tax); . Certain sales of tangible personal property that is shipped out of the state; . No tax on federal excise taxes collected on retail sales; . No tax on certain "casual sales" outside the normal scope of business. . 1991 legislation now allows hotel operators to reduce taxable gross receipts by the amount dis- bursed for hotel employees' salaries, wages, bonuses, retirement contributions and other benefits. . Effective July 1, 1992, gross income received by certain persons for planning, design, financing, construction or sale of "affordable housing units" is exempt from the tax, with various conditions and limitations (units must be completed by the end of 1994, for example). Taxpayers subject to GET and use taxes are required to file monthly returns on Form G-45. If your annual tax is less than $2,000, you may file quarterly, and if less than $1,000, you may file semi-annual returns. In any case, you must also file an annual reconciliation return on Form G-49. Finally, note that the GET is imposed on the seller, not on the consumer, so you need not pass on the tax. In fact, if you do add the 4% tax to the price you charge the consumer, you must pay more GET on the additional amount collected. Thus, on a $100 item, if you charge the consumer $104 to cover the tax, you will owe tax of 4% times $104, or $4.16 on the transaction, since you collected a total of $104. Some retailers add 4.16% tax to their charges. @CODE:EN @CODE: NM 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� � GROSS RECEIPTS TAX (NEW MEXICO) � 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴� Unlike most states, New Mexico does not have the typical sales and use tax that applies mostly to sales of tangible personal property. Instead, New Mexico has a "gross re- ceipts tax" on virtually all forms of gross income, includ- ing income from services as well as from the sale of goods. As such, it is a much broader and more pervasive tax than the sales tax imposed in all but a handful of the other 50 states. It applies to all gross receipts of all persons (including corporations, associations, etc.) selling pro- ducts or furnishing services within the state, but allows a number of deductions and exemptions. The tax rate is currently 5% (as of 7-1-91), but cities and counties are allowed to add on local gross receipts taxes, so that rates range from as low as 5.125% to as much as 6.75% in different localities. As a seller subject to the tax, you must register on Form RP-31 with the New Mexico Taxation and Revenue Department. Businesses are generally required to file monthly returns on Form CRS-1, which is used to report gross receipts tax and, if applicable, state income tax withheld from wages. Major exemptions from the gross receipts tax include wages, salaries and commissions paid to employees; receipts of growers, producers, or nonprofit associations from selling livestock, poultry and unprocessed agricultural products; interest or dividend income; receipts from sales of stocks, bonds or other securities; and receipts from the sale or leasing of oil, natural gas, or mineral interests. Sales of various goods and services for resale are usually deductible from the gross receipts tax base, if the buyer gives the seller the appropriate type of Nontaxable Trans- action Certificate. @CODE:EN