(a) There shall be personal liability for the taxes imposed under this chapter as provided in this section for the following amounts of gross rental, gross rental proceeds, or fair market rental value:
(1) Any amount collected as a recovery of the taxpayer's liability under this chapter, where the amount is passed on as the tax owed by the taxpayer under this chapter for the transaction and is separately stated or accounted for in a receipt, contract, invoice, billing, or other evidence of the business activity; or
(2) An amount equal to the tax liability under this chapter on a transaction where a taxpayer does not separately state or account for the amount as a tax recovery as provided in subsection (a)(1). For purposes of this subdivision, the amount of the imputed tax liability is the result of multiplying the gross rental, gross rental proceeds, or fair market rental value received in the transaction by the tax rate.
The amounts under subdivisions (a)(1) and (2) shall be held in trust for the benefit of the city and for payment to the city in the manner and at the time required by this chapter.
(b) The personal liability under this section applies to any officer, member, manager, or other person having control or supervision over amounts of gross rental, gross rental proceeds, or fair market rental value collected to pay the tax and held in trust under subsection (a), or who is charged with the responsibility for the filing of returns or the payment of tax on gross rental, gross rental proceeds, or fair market rental value collected and held in trust under subsection (a). The person shall be personally liable for any unpaid taxes and interest and penalties on those taxes, if such officer or other person wilfully fails to pay or to cause to be paid any taxes due from the taxpayer pursuant to this chapter.
This subsection does not apply to any officer, manager, or other person having control or supervision over amounts of gross proceeds or gross income collected to pay the tax and held in trust under subsection (a), or who is charged with the responsibility for the filing of returns or the payment of tax on gross rental, gross rental proceeds, or fair market rental value collected and held in trust under subsection (a) for a nonprofit organization.
For purposes of this subsection:
Nonprofit Organization. A corporate entity, association, or other duly chartered entity that is registered with the State and is exempt from the application of this chapter pursuant to HRS § 237D-3.
Wilfully Fails to Pay or to Cause to Be Paid. Shall be construed in accordance with judicial interpretations given to similar provisions of the Internal Revenue Code; consistent therewith, the term "wilfully" shall mean a voluntary, intentional violation of a known legal duty.
(c) An officer, member, manager, or other responsible person shall be liable only for taxes on gross rental, gross rental proceeds, or fair market rental value collected, plus interest and penalties on those taxes, that became due during the period the person had control, supervision, responsibility, or a duty to act for the taxpayer as described in subsection (b).
(d) Persons liable under subsection (b) are exempt from liability when nonpayment of the tax on gross rental, gross rental proceeds, or fair market rental value held in trust is for good cause as determined by the director.
(e) The voluntary or involuntary dissolution of the taxpayer or the withdrawal or surrender of its right to engage in business in this state will not discharge the liability hereby imposed.
(Added by Ord. 21-33)