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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Broken_Clock who wrote (72987)	3/4/2007 5:36:17 PM
From: Elroy Jetson	Read Replies (1) \| Respond to of 306849

After a quick review of Hawaii's Excise Tax, I find that it is neither a VAT Tax nor a Sales Tax. Hawaii imposes a 4% "Retail" Excise tax and a 0.5% tax on Wholesale transactions. bankrate.com The difference lies in their definition of what a "Retail" transaction is. They impose this "retail" Excise tax, at least in some instances, on parties other than the final consumer. An example from the "Hawaiian Reporter" is the imposition of the Excise Tax on oil sold to Hawaiian Electric Company which is used to make electricity, and an additional Excise Tax on the Electricity. This is quite different to a VAT tax or a Sales Tax. In a typical 4% Sales Tax system, Hawaiian Electric would not pay a Sales Tax on the oil purchased. Thus the total Sales Tax on a final product to the consumer remains a constant 4% - if the Sales Tax is imposed on that product. Sales Tax in California is not imposed on many "essential" products. In a typical VAT system, Hawaiian Electric would receive a government deduction for the VAT paid on their oil purchases when they sell electricity. Hawaiian Electric would pay net VAT only on their value contribution. Thus the total tax would be 4%. If a business bought electricity, the VAT they paid on their electricity is refundable from the VAT on their products - thus the total VAT on a final product to the consumer remains a constant 4%. .