Act 210 excludes from the general excise tax amounts received as rent for the rental or leasing of aircraft or aircraft engines used by the renter or lessee for interstate air transportation and exempts from the use tax, the importation and use of aircraft or aircraft engines by a renter or lessee for interstate air transportation.  The definition of "interstate air transportation" is the same as in 49 U.S.C. 40102.

Act 210 applies to rent payments made pursuant to an operating lease or a financing lease.

Currently, the importation of aircraft for lease or rent to lessees or renters using the aircraft for commercial transportation of passengers or goods is exempt from the use tax.  Act 210 expands the use tax exemption in Hawaii Revised Statutes (HRS) Section 238-1(6) to include aircraft and aircraft engines imported into the State by a lessee or renter for interstate air transportation.

Act 210 takes effect on July 1, 2001.

The Department will be revising its instructions for the general excise/use tax returns because of Act 210.

Current forms and other tax information are available at the Department's website at:   www.state.hi.us/tax.  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 (toll-free) to receive forms by mail or by fax.
 

/s/
MARIE Y. OKAMURA
Director of Taxation

HRS Section Explained:  HRS Section 237-24.3 and 238-1(6)