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The Honolulu Advertiser
Posted on: Thursday, April 29, 2010

Websites stay tax-free in Hawaii

Associated Press

HONOLULU Hawaii isn't passing a measure that would attempt to tax Internet shopping.

The Hawaii House of Representatives sent the bill back to committee Thursday, preventing it from getting a final vote after it had already passed the Senate.

The proposal would have tried to force online, out-of-state retailers to collect Hawaii's 4 percent general excise tax.

The measure passed the Hawaii Legislature last year, but Gov. Linda Lingle vetoed it.

Web-based companies including Amazon.com and Overstock.com initially dropped their Hawaii affiliate advertisers after the bill passed so they wouldn't have to collect sales taxes if it had become law.

Those partnerships were later reinstated.

The bill is SB2405.