HRS § 91-7 Authorizes Facial Declaratory Challenges to Tax Rules; HRS § 91-7(a) Is Venue (Not Jurisdiction), Overruling Hawaii Home Infusion Associates v. Befitel

I. Introduction

In Booking.com B.V. v. Suganuma. ICA s.d.o. (Supreme Court of Hawaiʻi, Aug. 7, 2026), the Hawaiʻi Supreme Court resolved a recurring procedural barrier facing taxpayers and regulated entities: whether a declaratory action under HRS § 91-7—which allows “any interested person” to seek a judicial declaration on the validity of an agency rule—can be used to challenge tax administrative rules, notwithstanding the “no taxes” limitation in the general declaratory judgment statute, HRS § 632-1.

The case arose after the Department of Taxation (“DoTax”) promulgated HAR § 18-237-29.53-10(a)(3) (the “Rule”) in 2018, clarifying that for certain online travel/transient accommodations bookings, commissioned-agent services are “used or consumed” where the booking is located (e.g., Hawaiʻi), thereby subjecting Booking.com—a Netherlands-based online booking platform—to Hawaiʻi’s general excise tax (“GET”) on Hawaiʻi bookings. Booking.com filed a circuit court action under HRS § 91-7 seeking to invalidate the Rule on federal grounds (ITFA, Commerce Clause, Supremacy Clause). While that action proceeded, DoTax issued a GET assessment exceeding $19 million (2010–2020), which Booking.com separately appealed to the tax appeal court.

Key issues before the Supreme Court included: (1) whether the HRS § 91-7 filing-location language is jurisdictional (as previously held in Hawaii Home Infusion Associates v. Befitel), (2) whether the case was moot after the tax appeal court invalidated the Rule, (3) whether Booking.com had standing as an “interested person,” and (4) whether HRS § 632-1’s “controversy with respect to taxes” prohibition bars an HRS § 91-7 facial challenge to a tax administrative rule.

II. Summary of the Opinion

The court vacated the ICA judgment and the circuit court’s dismissal, and remanded. It held:

  1. Hawaii Home Infusion Associates v. Befitel is overruled: the HRS § 91-7(a) reference to filing in the circuit where the petitioner resides or has its principal place of business is a venue provision, not a limitation on subject matter jurisdiction. Out-of-state plaintiffs may file where venue otherwise lies under HRS § 603-36(5) (e.g., where the agency is domiciled).
  2. The case is not moot even though the tax appeal court invalidated the Rule; the live issue is the availability of HRS § 91-7 relief for tax rules, and the public interest exception would apply in any event.
  3. Booking.com has standing as an “interested person” under HRS § 91-7.
  4. HRS § 632-1 does not bar an HRS § 91-7 facial challenge to a tax administrative rule: HRS § 91-7 contains no tax carve-out, and HRS § 632-1’s tax limitation cannot be “superimposed” onto HRS § 91-7.

III. Analysis

A. Precedents Cited

  • Hawaii Home Infusion Associates v. Befitel, 114 Hawaiʻi 87, 157 P.3d 526 (2007)
    Role in this opinion: The central precedent the court expressly overrules. Befitel treated HRS § 91-7(a)’s county filing language as a subject matter jurisdiction constraint. The Booking.com court rejects that characterization as inconsistent with statutory text, legislative purpose, and practical consequences—especially the “absurd result” that out-of-state entities could not bring HRS § 91-7 rule-validity challenges in Hawaiʻi at all.
  • Asato v. Procurement Policy Board, 132 Hawaiʻi 333, 322 P.3d 228 (2014)
    Role: Supplies the governing understanding of HRS § 91-7 standing: “any interested person” is broader than traditional “actual controversy” standing and includes plaintiffs whose interests “may have been adversely affected.” The court uses Asato to conclude Booking.com qualifies as “interested.”
  • Puana v. Sunn, 69 Haw. 187, 737 P.2d 867 (1987)
    Role: Clarifies HRS § 91-7’s scope: it authorizes attacks on a rule’s validity, not challenges to application of a rule. The court uses Puana to explain why Booking.com’s statement that it was not seeking an “application” ruling does not defeat standing; it underscores the statute’s facial-review design.
  • Ocean Resort Villas Vacation Owners Ass'n v. Cnty. of Maui, 147 Hawai'i 544, 465 P.3d 991 (2020)
    Role: The ICA relied on Ocean Resort Villas to treat the case as an impermissible tax-related declaratory action. The Supreme Court distinguishes it: Ocean Resort Villas was a HRS § 632-1 action challenging a county ordinance, not an HRS § 91-7 action challenging an agency rule. Therefore, it does not control whether HRS § 91-7 reaches tax rules.
  • State v. Kahawai, 103 Hawai'i 462, 83 P.3d 725 (2004)
    Role: Supports the interpretive rule that “may” is generally permissive. This undercuts Befitel’s mandatory reading of HRS § 91-7(a).
  • Castro v. Melchor, 142 Hawaiʻi 1, 414 P.3d 53 (2018) and In re Doe, 95 Hawaiʻi 183, 20 P.3d 616 (2001)
    Role: Provide the court’s interpretive framework: ascertain legislative intent primarily from statutory text, read in context and consistent with purpose.
  • Alpha, Inc. v. Bd. of Water Supply, 154 Hawaiʻi 486, 555 P.3d 173 (2024)
    Role: Provides the court’s statement of the in pari materia canon: statutes on the same subject matter may be read together when ambiguity exists. The court uses this canon in two different ways: (1) to read HRS § 91-7(a) alongside general venue statutes when venue/jurisdiction is contested; and (2) to reject DoTax’s attempt to use the canon to import HRS § 632-1’s tax limitation into HRS § 91-7 where HRS § 91-7 is not ambiguous on that point.
  • Nordic PCL Construction Inc. v. LPIHGC, LLC, 156 Hawaiʻi 325, 574 P.3d 1273 (2025)
    Role: Cited for the principle of avoiding statutory interpretations that yield “absurd results,” reinforcing the court’s rejection of Befitel’s jurisdictional reading.
  • Ahn v. Liberty Mut. Fire Ins. Co., 126 Hawai'i 1, 265 P.3d 470 (2011)
    Role: Provides the court’s cautionary standard for overruling precedent (“most cogent reasons and inescapable logic”). The court invokes this to justify overruling Befitel.
  • Kahoʻohanohano v. State, 114 Hawaiʻi 302, 162 P.3d 696 (2007)
    Role: Supplies the mootness test and the public interest exception factors. The court applies them to hold the controversy remains live and, alternatively, that the public interest exception would permit review.
  • Tax Foundation v. State, 144 Hawaiʻi 175, 439 P.3d 127 (2019) and Koga Eng'g & Const., Inc. v. State, 122 Hawaiʻi 60, 222 P.3d 979 (2010)
    Role: Frame standards for de novo review of jurisdiction and the principle that lack of subject matter jurisdiction can be raised at any time.
  • Kiaʻi Wai O Waiʻaleʻale v. Bd. of Land & Nat. Res., 157 Hawaiʻi 303, 576 P.3d 816 (2025)
    Role: Cited for de novo review of mootness determinations.

B. Legal Reasoning

1. Recharacterizing HRS § 91-7(a) as venue (and overruling Befitel)

The court’s first major move is structural: it separates subject matter jurisdiction from venue. Befitel treated the second sentence of HRS § 91-7(a) (directing where an action may be brought) as limiting the court’s power to hear the case at all. Booking.com holds instead that the text is non-jurisdictional and functions as an optional venue expansion.

The court’s interpretive steps are straightforward:

  • Textual focus (“jurisdiction” vs. “may”): HRS § 91-7 does not use the term “jurisdiction,” and the legislature “says ‘jurisdiction’ when it means jurisdiction.” Additionally, HRS § 91-7(a) uses “may,” which is generally permissive under State v. Kahawai.
  • Purpose: Relying on Asato v. Procurement Policy Board and the 1961 legislative history it discussed, the court emphasizes that HRS § 91-7 was meant to liberalize standing and expand access to judicial review of agency rules.
  • In pari materia with general venue law: The court reads HRS § 91-7(a) alongside HRS § 603-36(5), concluding HRS § 91-7(a) expands venue options for plaintiffs rather than restricting them.
  • Avoiding absurd results: Under Befitel, an out-of-state plaintiff would have no Hawaiʻi circuit in which it “resides” or has a “principal place of business,” effectively foreclosing HRS § 91-7 actions by non-Hawaiʻi entities—an outcome the court deems “absurd” and inconsistent with legislative intent.

Practically, the ruling reopens HRS § 91-7’s courthouse doors to nonresident regulated entities and clarifies that filing location disputes are venue issues (generally waivable and correctable), not jurisdictional defects (fatal and nonwaivable).

2. Mootness: keeping the justiciable issue in view

DoTax argued that the case became moot because the tax appeal court had already invalidated the Rule. The Supreme Court rejects that reframing: the certiorari issue was not “is the Rule valid,” but whether HRS § 91-7 declaratory relief is available for tax administrative rules despite HRS § 632-1. That question remained “alive and squarely before this court.”

The court also explains why this dispute fits the public interest exception under Kahoʻohanohano v. State: it is public in nature, guidance is desirable for officials and the public, and the issue is likely to recur (tax rules and pre-enforcement challenges are recurring features of tax administration).

3. Standing under HRS § 91-7: “interested person” is broad and fits facial challenges

The ICA denied standing based on Booking.com’s statement that it did not seek a ruling about the Rule’s application to it. The Supreme Court corrects the premise: under Puana v. Sunn, HRS § 91-7 is precisely about validity (a facial challenge), not application (an as-applied dispute).

Using Asato v. Procurement Policy Board, the court reiterates that HRS § 91-7 does not require an “actual case or controversy” in the HRS § 632-1 sense and covers parties whose interests “may have been adversely affected.” Given the Rule’s clear effect on online booking platforms for Hawaiʻi stays—and the later $19 million assessment— Booking.com easily qualifies as “interested.”

4. The core holding: HRS § 632-1’s tax prohibition does not bar HRS § 91-7 tax-rule validity actions

The decisive statutory holding is that HRS § 632-1 (general declaratory judgments) does not constrain HRS § 91-7 (rule validity declaratory actions) with respect to tax administrative rules.

The court’s reasoning is anchored in:

  • Plain language: HRS § 91-7 contains no restriction excluding tax rules from its coverage.
  • Limits of in pari materia: The doctrine is used to resolve ambiguity; here, the court finds no ambiguity in HRS § 91-7 about whether tax rules may be challenged. Therefore, DoTax’s attempt to “superimpose” HRS § 632-1’s tax carve-out onto HRS § 91-7 fails.
  • Statutory separation and special-remedy logic: The court characterizes HRS § 632-1 and HRS § 91-7 as “separate, independent statutes” and stresses that rule-validity declaratory actions are to proceed under HRS § 91-7 rather than being blocked by the tax limitation in HRS § 632-1.
  • Functional fairness and timing: The opinion highlights the practical harm of forcing taxpayers to wait for an assessment to raise a facial challenge, particularly where assessments can reach back years and include substantial penalties and interest (as Booking.com alleged happened here).

The court also rejects the ICA’s reliance on Ocean Resort Villas Vacation Owners Ass'n v. Cnty. of Maui as “inapposite” because it involved a different statute (HRS § 632-1) and a different target (a county ordinance, not an agency rule).

C. Impact

  • Pre-enforcement review of tax rules: Regulated entities and taxpayers may use HRS § 91-7 to bring facial validity challenges to DoTax rules without being barred by HRS § 632-1’s tax controversy limitation. This can shift disputes earlier in time (before large retroactive assessments accrue).
  • Nonresident access and statewide uniformity: By overruling Befitel and treating HRS § 91-7(a) as venue, not jurisdiction, the court ensures out-of-state entities can litigate Hawaiʻi administrative rule validity in Hawaiʻi courts—often in the circuit where the agency is domiciled—promoting consistent administrative law review.
  • Clearer channeling of disputes: The opinion reinforces a division of labor: HRS § 91-7 for validity of rules; other procedures (including tax appeal processes) for disputes over a rule’s application and specific assessments—while confirming that facial invalidity claims are not categorically confined to tax appeal litigation.
  • Administrative drafting and litigation risk: Agencies promulgating tax rules should anticipate more direct facial challenges. That prospect can influence rulemaking records, statutory authority analyses, and procedural compliance to withstand HRS § 91-7 scrutiny.

IV. Complex Concepts Simplified

Declaratory relief
A court declaration resolving a legal question (e.g., “this rule is invalid”) without necessarily awarding money damages or an injunction.
Subject matter jurisdiction vs. venue
Jurisdiction is the court’s power to hear a type of case; if missing, the case must be dismissed. Venue is the proper location for the case among courts that do have jurisdiction; venue errors are typically correctable (e.g., transfer). Booking.com holds HRS § 91-7(a)’s county language is about venue.
Standing / “any interested person” (HRS § 91-7)
Under HRS § 91-7, standing is broader than traditional “actual controversy” standing; a person is “interested” if their interests may be adversely affected by the rule’s validity.
Facial validity challenge vs. as-applied challenge
A facial challenge argues the rule is invalid in law. An as-applied challenge argues the rule was wrongly applied to a particular party in particular facts. HRS § 91-7 is directed at facial validity, not application (per Puana v. Sunn).
Mootness and the public interest exception
A case is “moot” if the court can no longer grant effective relief. Even then, courts may decide issues of recurring public importance under the public interest exception (as described in Kahoʻohanohano v. State).
In pari materia
A canon allowing related statutes to be read together to resolve ambiguity. Booking.com uses it to harmonize HRS § 91-7(a) with general venue law, but rejects using it to import HRS § 632-1’s tax limitation into HRS § 91-7 where no ambiguity exists.

V. Conclusion

Booking.com B.V. v. Suganuma establishes two major procedural rules in Hawaiʻi administrative and tax litigation: (1) HRS § 91-7(a) is a venue provision, not a subject matter jurisdiction limitation, and Hawaii Home Infusion Associates v. Befitel is overruled; and (2) HRS § 632-1’s tax controversy prohibition does not bar HRS § 91-7 declaratory actions challenging the validity of tax administrative rules.

The decision strengthens pre-enforcement judicial review of administrative tax rulemaking, preserves HRS § 91-7’s broad “interested person” standing, and clarifies that Hawaiʻi’s general declaratory judgment statute cannot be used to contract the legislature’s specific remedial pathway for testing the legality of agency rules.