Haw. Code R. § 18-237-13(6)-05
Example 1: Intermediary, a consulting company located in California, enters into an agreement with Customer. Intermediary contracts with Service Provider, located in Hawaii, to perform services in Hawaii for Customer. Intermediary, however, does not perform any services in Hawaii. Service Provider bills Intermediary and Intermediary bills Customer. Customer pays Intermediary and Intermediary pays Service Provider.
In order for Service Provider to be eligible for the intermediary services rate, both Service Provider and Intermediary must be licensed persons in this State. Intermediary, however, is not a licensed person in this State because Intermediary is not subject to the taxing jurisdiction of the State. The intermediary services rate is not applicable to the payment Service Provider receives from Intermediary. Service Provider is subject to the general excise tax at the rate of four percent on the total payments received from Intermediary.
Haw. Code R. § 18-237-13(6)-05