(a) In any case of the sale or transfer in bulk of the whole, or a large part of a stock of merchandise and fixtures, or merchandise, or fixtures, or other assets or property of a business, otherwise than in the ordinary course of trade, business, commerce, or sales, the seller shall make a written and verified report of the bulk sale or transfer to the department not later than ten days after the possession, or the control, or the title of the property, or any part thereof, has passed to the purchaser. The report shall contain the name and address of the purchaser, a brief description of the property sold and the purchase price, the date when the sale or transfer is to be or was consummated, and such other facts as the department may require. The purchaser may make the report for the seller.
Attorney's Note
Under the Hawaii Revised Statutes, punishments for crimes depend on the classification. In the case of this section:
| Class | Prison | Fine |
|---|
| misdemeanor | up to 1 year | $2,000 |
For details, see
Haw. Rev. Stat. § 706-663
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Terms Used In Hawaii Revised Statutes 237-43
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Business: includes all activities (personal, professional, or corporate) engaged in or caused to be engaged in with the object of gain or economic benefit either direct or indirect, but does not include casual sales. See Hawaii Revised Statutes 237-2
- Conviction: A judgement of guilt against a criminal defendant.
- Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.
- Intangible property: Property that has no intrinsic value, but is merely the evidence of value such as stock certificates, bonds, and promissory notes.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Lien: A claim against real or personal property in satisfaction of a debt.
- penalties: when used in connection with the additions to the tax imposed for delinquency in payment, includes interest as well. See Hawaii Revised Statutes 237-1
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- sales: includes the exchange of properties as well as the sale thereof for money. See Hawaii Revised Statutes 237-1
“Property” means anything that may be the subject of ownership, including every kind of asset, whether real or personal, tangible or intangible, and without limitation, such as land and buildings, goodwill, notes, accounts, and other intangible property. The term “property” shall not include any interest in residential real property.
“Purchase price” means the total fair market value, as of the date of sale or transfer, of all property transferred, whether or not money or property is exchanged therefor.
“Purchaser” means any person who receives property in a bulk sale or transfer, whether or not money or property is exchanged therefor.
“Sale” means the transfer of property for compensation.
“Seller” means any person who sells or transfers any property in a bulk sale or transfer, whether or not money or property is exchanged therefor.
“Transfer” means the sale, conveyance, or distribution by any mode, direct or indirect, absolute or conditional, voluntary or involuntary, of title to or beneficial ownership in property, or interest therein. The term “transfer” does not include a bona fide, arm’s length:
(1) Creation, modification, or termination of a lease interest;
(2) Creation, modification, or release of a lien or encumbrance; or
(3) Transfer occurring as a result of the enforcement of a lien.
(e) Failure to make the report required by this section shall be punishable by a fine of not more than $100. Any seller who wilfully fails to make the report required by this section shall, in addition to other penalties provided by law, be guilty of a misdemeanor and upon conviction thereof, shall be fined not more than $5,000 or imprisoned not more than one year, or both.
(f) The purchaser shall have the purchaser’s remedy against the seller for the amount of taxes, penalties, or interest paid by the purchaser.
(g) This section supplements and does not displace any remedies available to the department under the Uniform Fraudulent Transfer Act and the principles of law and equity.
