REPORT TITLE:
Taxation; Call Centers


DESCRIPTION:
Exempts certain activities of call centers from taxation.  (SB744
SD1 HD1)

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        744
THE SENATE                              S.B. NO.           S.D. 1
TWENTIETH LEGISLATURE, 1999                                H.D. 1
STATE OF HAWAII                                            
                                                             
________________________________________________________________
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                     A BILL FOR AN ACT

RELATING TO TAXATION.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 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-     Call centers; exemption; engaging in business;
 
 5 definitions.  (a)  In addition to the amounts not taxable under
 
 6 section 237-24, this chapter shall not apply to amounts received
 
 7 from a person operating a call center by a person engaged in
 
 8 business as a telecommunications common carrier for interstate or
 
 9 foreign telecommunications services, including toll-free
 
10 telecommunications, telecommunication capabilities for electronic
 
11 mail, voice and data telecommunication, computerized telephone
 
12 support, facsimile, wide area telecommunication services, or
 
13 computer to computer communication.
 
14      (b)  The establishment of a call center in this State by any
 
15 person shall not be used by itself by the State to find that any
 
16 other part of the person's business is engaged in business in
 
17 this State for the purposes of this chapter.  Gross income or
 
18 gross proceeds received by a call center for customer service and
 

 
Page 2                                                     744
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 1 support shall be exempt from the measure of taxes imposed by this
 
 2 chapter.
 
 3      (c)  The department, by rule, may provide that the person
 
 4 providing the telecommunications service may take from the person
 
 5 operating a call center a certificate, in a form that the
 
 6 department shall prescribe, certifying that the amounts received
 
 7 for telecommunications services are for operating a call center
 
 8 consisting of five or more full-time customer or technical
 
 9 service representatives, or their equivalent.  If the certificate
 
10 is required by rule of the department, the absence of the
 
11 certificate in itself shall give rise to the presumption that the
 
12 amounts received from the sale of telecommunications services are
 
13 not for operating a call center.
 
14      (d)  As used in this section:
 
15      "Call center" means a physical or electronic operation that
 
16 focuses on providing customer service and support for computer
 
17 hardware and software companies, software service organizations,
 
18 and telecommunications support services, within an organization
 
19 in which a managed group of individuals spend most of their time
 
20 engaging in business by telephone, usually working in a
 
21 computer-automated environment.
 
22      "Customer service and support" means product support,
 
23 technical assistance, sales support, phone or computer based
 

 
Page 3                                                     744
                                     S.B. NO.           S.D. 1
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 1 configuration assistance, software upgrade help lines, and
 
 2 traditional help desk services.
 
 3      "Telecommunications common carrier" means any person that
 
 4 owns, operates, manages, or controls any facility used to furnish
 
 5 telecommunications services for profit to the public, or to
 
 6 classes of users as to be effectively available to the public,
 
 7 engaged in the provision of services, such as voice, data, image,
 
 8 graphics, and video services, that make use of all or part of
 
 9 their transmission facilities, switches, broadcast equipment,
 
10 signalling, or control devices.
 
11      "Telecommunications service" or "telecommunications" means
 
12 the offering of transmission between or among points specified by
 
13 a user, of information of the user's choosing, including voice,
 
14 data, image, graphics, and video without change in the form or
 
15 content of the information, as sent and received, by means of
 
16 electromagnetic transmission, or other similarly capable means of
 
17 transmission, with or without benefit of any closed transmission
 
18 medium."
 
19      SECTION 2.  Chapter 239, Hawaii Revised Statutes, is amended
 
20 by adding a new section to be appropriately designated and to
 
21 read as follows:
 
22      "239-     Call centers; exemption; engaging in business;
 
23 definitions.  (a)  This chapter shall not apply to amounts
 

 
Page 4                                                     744
                                     S.B. NO.           S.D. 1
                                                        H.D. 1
                                                        

 
 1 received from a person operating a call center by a person
 
 2 engaged in business as a telecommunications common carrier for
 
 3 interstate or foreign telecommunications services, including
 
 4 toll-free telecommunications, telecommunication capabilities for
 
 5 electronic mail, voice and data telecommunication, computerized
 
 6 telephone support, facsimile, wide area telecommunication
 
 7 services, or computer to computer communication.
 
 8      (b)  The department, by rule, may provide that the person
 
 9 providing the telecommunications service may take from the person
 
10 operating a call center a certificate, in a form that the
 
11 department shall prescribe, certifying that the amounts received
 
12 for telecommunications services are for operating a call center.
 
13 If the certificate is required by rule of the department, the
 
14 absence of the certificate in itself shall give rise to the
 
15 presumption that the amounts received from the sale of
 
16 telecommunications services are not for operating a call center.
 
17      (c)  As used in this section:
 
18      "Call center" means a physical or electronic operation that
 
19 focuses on providing customer service and support for computer
 
20 hardware and software companies, software service organizations,
 
21 and telecommunications support services, within an organization
 
22 in which a managed group of individuals spend most of their time
 

 
 
 
Page 5                                                     744
                                     S.B. NO.           S.D. 1
                                                        H.D. 1
                                                        

 
 1 engaging in business by telephone, usually working in a computer-
 
 2 automated environment.
 
 3      "Customer service and support" means product support,
 
 4 technical assistance, sales support, phone or computer based
 
 5 configuration assistance, software upgrade help lines, and
 
 6 traditional help desk services."
 
 7      SECTION 3.  New statutory material is underscored.
 
 8      SECTION 4.  This Act shall take effect on July 1, 1999;
 
 9 provided that section 1 shall apply to gross income or gross
 
10 proceeds received after June 30, 1999; and provided that
 
11 section 2 shall apply to the entire gross income from the
 
12 activity set forth in section 2 received after June 30, 1999.
 
13 This Act shall be repealed as of January 1, 2003.
 
14 
 
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