Tax; Entertainment Industry

Exempts amounts received from the construction of an
entertainment industry production facility from general excise
tax; amends definition of "use" to include material, parts,
tools, or equipment imported or purchased for use in the
entertainment industry.  (SD1)

THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Chapter 237, Hawaii Revised Statutes, is amended
 2 by adding a new section to be appropriately designated and to
 3 read as follows:
 4      "237-     Entertainment industry production facilities.
 5 (a)  This chapter shall not apply to amounts received from the
 6 construction of an entertainment industry production facility in
 7 the State.
 8      (b)  As used in this section:
 9      "Entertainment industry production facility" means a
10 facility on not less than one hundred acres including production
11 and ancillary facilities for motion picture production,
12 television production, and music production such as sound stages,
13 sound studios, a backlot, warehouse space, and related
14 administrative and employee space.
15      "Motion picture production" means all of the activities
16 necessary to take a commercial motion picture from concept to
17 finished product suitable for distribution and exhibit.
18      "Music production" means all of the acts necessary to take
19 music from the sheet music and conceptual stage to a finished

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 1 product suitable for impression into a master recording that can
 2 be used to make duplicates in compact disc, cassette, or other
 3 commercial form.
 4      "Television production" means all of the activities
 5 necessary to take a program from concept to finished product
 6 suitable for broadcast and viewing."
 7      SECTION 2.  Section 238-1, Hawaii Revised Statutes, is
 8 amended by amending the definition of "use" to read as follows:
 9      ""Use" (and any nounal, verbal, adjective, adverbial, and
10 other equivalent form of the term) herein used interchangeably
11 means any use, whether the use is of such nature as to cause the
12 property to be appreciably consumed or not, or the keeping of the
13 property for such use or for sale, and shall include the exercise
14 of any right or power over tangible personal property incident to
15 the ownership of that property, but the term "use" shall not
16 include: 
17      (1)  Temporary use of property, not of a perishable or
18           quickly consumable nature, where the property is
19           imported into the State for temporary use (not sale)
20           therein by the person importing the same and is not
21           intended to be, and is not, kept permanently in the
22           State (as for example without limiting the generality
23           of the foregoing language:  (A) in the case of a

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 1           contractor importing permanent equipment for the
 2           performance of a construction contract, with intent to
 3           remove, and who does remove, the equipment out of the
 4           State upon completing the contract; (B) in the case of
 5           moving picture films imported for use in theaters in
 6           the State with intent or under contract to transport
 7           the same out of the State after completion of such use;
 8           (C) in the case of a transient visitor importing an
 9           automobile or other belongings into the State to be
10           used by the transient visitor while therein but which
11           are to be used and are removed upon the transient
12           visitor's departure from the State); 
13      (2)  Use by the taxpayer of property acquired by the
14           taxpayer solely by way of gift;
15      (3)  Use which is limited to the receipt of articles and the
16           return thereof, to the person from whom acquired,
17           immediately or within a reasonable time either after
18           temporary trial or without trial; 
19      (4)  Use of goods imported into the State by the owner of a
20           vessel or vessels engaged in interstate or foreign
21           commerce and held for and used only as ship stores for
22           the vessels; 
23      (5)  The use or keeping for use of household goods, personal

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 1           effects, and private automobiles imported into the
 2           State for nonbusiness use by a person who (A) acquired
 3           them in another state, territory, district, or country,
 4           (B) at the time of the acquisition was a bona fide
 5           resident of another state, territory, district, or
 6           country, (C) acquired the property for use outside the
 7           State, and (D) made actual and substantial use thereof
 8           outside this State; provided that as to an article
 9           acquired less than three months prior to the time of
10           its importation into the State it shall be presumed,
11           until and unless clearly proved to the contrary, that
12           it was acquired for use in the State and that its use
13           outside the State was not actual and substantial; 
14      (6)  The leasing or renting of any aircraft or the keeping
15           of any aircraft solely for leasing or renting to
16           lessees or renters using the aircraft for commercial
17           transportation of passengers and goods;
18      (7)  The use of oceangoing vehicles for passenger or
19           passenger and goods transportation from one point to
20           another within the State as a public utility as defined
21           in chapter 269; [and]
22      (8)  The use of material, parts, or tools imported or
23           purchased by a person licensed under chapter 237 which

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 1           are used for aircraft service and maintenance, or the
 2           construction of an aircraft service and maintenance
 3           facility as those terms are defined in section
 4           237-24.9[.]; and
 5      (9)  The use of material, parts, tools, or equipment
 6           imported or purchased by a person licensed under
 7           chapter 237 that are used in an entertainment industry
 8           production facility, or the construction of an
 9           entertainment industry production facility as those
10           terms are defined in section 237-    .
11      With regard to purchases made and distributed under the
12 authority of chapter 421, a cooperative association shall be
13 deemed the user thereof."
14      SECTION 3.  Statutory material to be repealed is bracketed.
15 New statutory material is underscored.
16      SECTION 4.  This Act shall take effect on July 1, 1999.