Bill Text: HI HB1919 | 2022 | Regular Session | Introduced
Bill Title: Relating To General Excise Tax Exemptions.
Spectrum: Partisan Bill (Republican 3-0)
Status: (Introduced - Dead) 2022-02-04 - The committee(s) on ECD recommend(s) that the measure be deferred. [HB1919 Detail]
Download: Hawaii-2022-HB1919-Introduced.html
HOUSE OF REPRESENTATIVES |
H.B. NO. |
1919 |
THIRTY-FIRST LEGISLATURE, 2022 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
Relating to general excise tax exemptions.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION
1. The legislature finds that Hawaii has the highest cost of living
in the nation. The general excise tax is levied on nearly all
economic activity, which creates a highly regressive tax system by
disproportionately affecting low-income and middle-class families as a
percentage of total income. Although businesses are required to pay
general excise taxes out of their gross receipts, those taxes are passed on to
customers in the form of higher prices.
Food is a major
expense for Hawaii families. In 2014, the average spent on food
annually for a two-person household was $9,978 in Maui county, $9,901 in Kauai
county, $9,467 in Honolulu county, and $7,676 in Hawaii county. An
average two-person household would save over $400 each year if food were exempt
from the general excise tax, which is significantly more than the existing food
income tax credit for low-income families. Larger households would
have an even greater savings.
Thirty-two states
plus the District of Columbia exempt groceries from their sales taxes, and
another six states tax groceries at lower rates than other
goods. The legislature finds that it is time for Hawaii to join this
majority.
Health care is
another major expense for local families. Hawaii is one of only a
handful of states that taxes medical and dental services. Each
physician supports an average of $2.2 million in annual economic output and
13.84 jobs. Hawaii's tax policy burdens the ability of medical
professionals to support the local community and makes their services more
expensive for residents. Forty-one states generally exclude medical
services from their sales taxes.
Finally, feminine
hygiene products are another necessity subject to the general excise
tax. Feminine hygiene products are an essential purchase that cost
women an average of $300 a year. Several states that impose
statewide sales or excise taxes similar to Hawaii exempt feminine hygiene
products from taxation. Hawaii should follow these states by
exempting feminine hygiene products from the general excise tax.
Because the general
excise tax affects almost all areas of economic activity, it can make it
difficult for average families to afford basic life expenses like food and
medical care. The purpose of this Act is to help alleviate the general excise
tax burden on local households by exempting food, medical services, and
feminine hygiene products.
SECTION
2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new
section to be appropriately designated and to read as follows:
§237- Amounts not
taxable for food.
(a) The excise tax assessed under this chapter shall
not apply to amounts received for food or food ingredients.
(b) The excise tax assessed under this chapter shall
apply to food or food ingredients that are furnished, prepared, or served as
meals, except:
(1) In the case of persons sixty years of age or over,
or who receive supplemental security income benefits, or disability or
blindness payments under Title I, II, X, XIV, or XVI or the Social Security Act
(42 U.S.C. 301 et set., 401 et seq., 1201 et seq., 1351 et seq., 1381 et seq.)
and their spouses, meals prepared by and served in senior citizen's centers,
apartment buildings occupied primarily by such persons, public or private
nonprofit establishments, eating or otherwise, that feed such persons, private
establishments that contract with the appropriate agency of the State to offer
meals for such persons at concessional prices, and meals prepared for and
served to residents of federally subsidized housing for the elderly;
(2) In the case of persons sixty years of age or over
and persons who are physically or mentally handicapped or otherwise disabled
that they are unable to adequately prepare all of their meals, meals prepared
for and delivered to them and their spouses at their home by a public or private
nonprofit organization or by a private establishment that contracts with the
appropriate state agency to perform such services at concessional prices;
(3) In
the case of disabled or blind recipients of
benefits under Title I, II, X, XIV, or XVI or the Social Security
Act (42 U.S.C. 301 et set., 401 et seq., 1201 et seq., 1351 et seq., 1381 et
seq.), who are residents in a public or private nonprofit group living
arrangement that serves no more than sixteen residents and is certified by the
appropriate state agency or agencies, meals prepared and served under such
arrangement;
(4) In the case of women and children temporarily
residing in public on private nonprofit shelters for battered women and
children, meals prepared and served by such shelters; and
(5) In
the case of households that do not reside in
permanent dwellings and households that have no fixed mailing
addresses, meals prepared for and served by a public or private nonprofit
establishment approved by an appropriate state or local agency that feeds such
individuals by private establishments that contract with the appropriate agency
of the State to offer meals for such individuals at concessional prices.
(c) As used in this
section:
"Alcoholic beverages"
means beverages that are suitable for human consumption and contain one-half of
one percent or more of alcohol by volume.
"Dietary supplement"
means any product, other than tobacco, intended to supplement the diet that:
(1) Contains one or more of the following dietary
ingredients:
(A) A vitamin;
(B) A mineral;
(C) An herb or other
botanical element;
(D) An amino acid;
(E) A dietary
supplement for use by humans to
supplement a person's diet by increasing the total dietary intake;
or a concentrate metabolite, constituent, extract, or combination of any
ingredient described in this definition;
(2) Is intended for ingestion in tablet, capsule,
powder, softgel, gelcap, or liquid form, or if not intended for ingestion in
such form, is not represented as conventional food and is not represented for
use as a sole item of a meal or of a diet; and
(3) Is required to be labeled as a dietary supplement, identifiable
by the "supplemental facts" box found on the label as required
pursuant to title 21 Code of Federal Regulations section 101.36, as amended or
renumbered.
"Food" or "food
ingredients" mean substances, whether in liquid, concentrated, solid,
frozen, dried, or dehydrated form, that are sold for their ingestion or chewing
by humans and are consumed for their taste or nutritional value. Food
or food ingredients does not include alcoholic beverages, tobacco, prepared
food, soft drinks, dietary supplements, or food or food ingredients sold from a
vending machine, whether cold or hot; provided that food or food ingredients
sold from a vending machine that is subsequently heated shall be subject to
this chapter.
"Prepared food" means:
(1) Food
sold in a heated state or heated in by the seller;
(2) Food sold with eating utensils provided by the
seller, including plates, knives, forks, spoons, chopsticks, glasses, cups,
napkins, or straws. A plate does not include a container or packaging used to
transport the food; or
(3) Two or more food ingredients mixed or combined by
the seller for sale as a single item, except:
(A) Food
that is only cut, repackaged, or pasteurized by the seller; or
(B) Raw eggs, meat, poultry, or foods
containing
these raw animal foods requiring cooking by the consumer as
recommended by the federal Food and Drug Administration in Chapter 3, part
401.11 of the Food Code, published by the Food and Drug Administration, as
amended or renumbered, to prevent foodborne illness.
Prepared food does not include
the following food or food ingredients:
(1) Food sold in an unheated
state by weight or volume as a single item; or
(2) Bakery
items, such as bread, rolls, buns, biscuits, bagels, croissants, pastries,
donuts, danish, cakes, tortes, pies, tarts, muffins, bars, cookies or
tortillas.
"Soft drinks" means
nonalcoholic beverages that contain natural or artificial
sweeteners. Soft drinks do not include beverages that contain:
(1) Milk or milk products;
(2) Soy, rice or
similar milk substitutes; or
(3) Greater than fifty
percent vegetable or fruit juice by volume.
"Tobacco" means cigarettes, cigars, chewing or pipe
tobacco, or any other item that contains tobacco."
SECTION 3. Chapter 237, Hawaii
Revised Statutes, is amended by adding a new section to be appropriately
designated and to read as follows:
"§237- Exemption
for medical services. (a) There shall be
exempted from, and excluded from the measure of, the taxes imposed by this
chapter all of the gross proceeds arising from the sale of medical services.
(b) As used in this section,
"medical services" means: Professional services provided by
hospitals, medical clinics and facilities that are licensed by the appropriate
state agencies and services are rendered under chapters 436E, 442, 447, 448,
448B, 451A, 451J, 451K, 452, 453,453D, 455, 457, 457A, 457G, 458, 459, 460,
461, 461J, 463E, 465, 465D, 466D, 466J, and 468E."
SECTION
4. Chapter 237, Hawaii Revised Statutes, is amended by adding a new
section to be appropriately designated and to read as follows:
"§237- Exemption
for feminine hygiene products. (a) There shall
be exempted from, and excluded from the measure of, the taxes imposed by this
chapter all of the gross proceeds arising from the sale of feminine hygiene
products.
(b) As
used in this section, "feminine hygiene product" means: a sanitary
napkin, sanitary towel, tampon, panty liner, douche, feminine hygiene syringes,
menstrual cup, sanitary pad, or vaginal creams, foams, ointments, jellies,
powders, and sprays used for hygiene purposes."
SECTION 5. In
codifying the new sections added by sections 2,3, and 4 of this Act, the
revisor of statutes shall substitute appropriate section numbers for the
letters used in designating the new sections in this Act.
SECTION 6. New
statutory material is underscored.
SECTION 7. This act
shall take effect upon its approval and shall apply to taxable years beginning
after December 31, 2022.
INTRODUCED
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Report
Title:
General Excise Tax; Food, Medical Services, and Feminine Hygiene
Product Tax Exemption
Description:
Exempts certain foods, medical services, and feminine hygiene products
from the general excise tax.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.