Q: What is the new excise tax surcharge?

A: It is a new half-percentage-point charge added to the state's 4 percent general excise tax to pay for O'ahu's mass transit. That amounts to a 12.5 percent increase over the existing tax.

Q: What transactions are subject to the tax?

A: In general, any income earned from any transaction related to an O'ahu customer is subject to the tax. That includes all retail goods and services, contracting, renting or leasing property, commission and interest income.

Q: Who must pay it?

A: O'ahu-based businesses and landlords must generally pay the surcharge on any O'ahu-related transaction. Neighbor Island and out-of-state businesses that deliver goods or services to O'ahu and have a "physical presence" on O'ahu, such as an office or employee, also are subject to the tax on the portion of their income generated on O'ahu.

Q: Who doesn't have to pay?

A: Neighbor Island and out-of-state businesses that do not deliver any goods or services to O'ahu and landlords who do not have any rental property on O'ahu are not subject to the tax.

Q: How much can a business charge a customer?

A: Businesses can collect a maximum of 4.712 percent of a purchase price from their customer. The extra money is allowed to cover the expense of collecting the tax.

Q: When does the tax take effect?

A: Jan. 1, 2007.

Q: Where can I get more information:

A: The state Tax Department has a Web site with information about the surcharge at www.hawaii.gov/tax/surcharge. It also has a customer service phone line at 587-4242 or toll-free from the Neighbor Islands at (800) 222-3229.