In re the Tax Appeal of Pacific Machinery, Inc.

This is an appeal from a judgment of the Tax Appeal Court in favor of the taxpayer. Section 237-20, HRS, is entitled “Principles applicable in certain situations.” The last sentence of that section reads:

The reimbursement of costs or advances made for or on behalf of one person by another shall not constitute gross income of the latter, unless the person receiving such reimbursement also receives additional monetary consideration for making such costs or advances.

In In Re Island Holidays, Ltd., 59 Haw. 307 at 315, 582 P.2d 703 (1978), we stated with respect to that statute:

Each sentence of…