HAR §15-6-13. the contract of sale and invoice

Among the circumstances that are considered in making this det ermination are when the risk of loss transferred from the sell er to the purchaser, where delivery occurs , and when title to the property sold passed from the seller to the purchaser under the provisions of the uniform commercial code , chapter 490, HRS. A statement in a contract that t itle passes at a certain time or event will not in itself create a presumption of passing of title for purposes of this section, unless title has in fact passed considering a ll of the facts and circumstances . (c) The application of this section is illustrated in the following examples : Example 1: ABC Company is located in an area designated as an enterprise zone. ABC is a wholesaler of electronic parts and equipment . The purchasers take title and receive delivery of the parts and equipment in the zone . Accordi ngly, ABC will qualify for tax credits against any taxes due the State and the general excise tax exemption. Example 2 : ABC Seafood Company is located in an area designated as an enterprise zone. ABC sells the seafood at wholesale to purchasers who take title to the seafood within the zone and receive delivery of the seafood within the zone . ABC also sells the seafood at retail t o customers who come t o ABC ' s p l ace of business. The whol esale sales will qualify for the income tax credits and general excise tax exemption . The retai l sales to customers, however, will not qualify . Accordingly, ABC wil l have to allocate the income 6- 28 314 3 §15-6-13 recei ved from each type of sale and claim income t ax credits and the general excise tax exemption only for wholesale sales . Example 3 : ABC Ranch is located in an area designated as an enterprise zone. ABC raises cattle and various food crops. ABC sells the cattle and crops at wholesale to purchasers who receive title and delivery within the zone . ABC will q ualify for the tax credits and general excise exemption . Example 4 : Assume the same facts as in Exampl e 3, except that ABC also sells cattl e and crops to purchasers who receive possession of t he cattle and crops in an enterprise zone outside of t he county that ABC is located in. The contract provides that title passes to the purchaser upon execution of the contract but also provides that ABC must bear t he cost of delivery and any ris k of loss . Under applicable law, title is deemed not to pass to the purchaser and ABC will have to apportion the income received from the sales outside the county that ABC is located in and claim income tax credits and the general excise tax exemption only for sales where the purchasers receive title within an enterprise zone located within the same county in which the cattle and crops are sold . [Eff 11/3/90; am and comp FEB 2 8 2015 ] (Auth : HRS §209E-8) (Imp: HRS §209E-9) 6-29 31 4 3 §15-6-14