Bill Text: HI HB937 | 2025 | Regular Session | Introduced
Bill Title: Relating To The General Excise Tax.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2025-01-23 - Referred to ECD, FIN, referral sheet 3 [HB937 Detail]
Download: Hawaii-2025-HB937-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
937 |
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THIRTY-THIRD LEGISLATURE, 2025 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
Relating to THE General Excise Tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The
legislature finds that the federal government established various relief
programs to provide critical assistance to millions of individuals,
families, and businesses, during the COVID-19 pandemic and the
nation's recovery therefrom, pursuant to the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act) effective March 27, 2020, and the American
Rescue Plan Act of 2021 (ARPA), effective March 11, 2021.
The
legislature further finds that the CARES Act created
the Paycheck Protection Program (PPP), which provided a forgivable loan to
small businesses, and the Economic Injury Disaster Loan Emergency Advances
(EIDL) Grant, which provided loan advances that do not need to be repaid, to
small businesses. Likewise, ARPA created
the Restaurant Revitalization Fund (RRF) to provide grants to food and beverage
businesses that experienced revenue loss related to the COVID-19 pandemic.
The
legislature also finds that on May 4, 2020, the department of taxation issued
Tax Information Release No. 2020‑02 (Revised), providing guidance on
the State's tax treatment of various COVID-19 relief programs and payments
under the CARES Act, which specified that in light of the severity of the
economic impact of the COVID-19 pandemic, state general excise tax will not be
imposed on the loan amounts forgiven under PPP and EIDL Grants.
The
legislature additionally finds that in 2024, the department of taxation
announced that the general excise tax exemption applicable to the forgiven PPP
loans and EIDL Grants under the CARES Act does not apply to the RRF grants
under ARPA, despite the purpose of RRF grants aligning with the rationale
behind the PPP and EIDL Grants.
Accordingly,
the purpose of this Act is to exempt Restaurant Revitalization Fund grants received
by eligible businesses pursuant to the American Rescue Plan Act of 2021 from the
state general excise tax.
SECTION 2. (a) Any grants received from the federal Restaurant Revitalization Fund by an eligible business pursuant to the American Rescue Plan Act of 2021 shall not be subject to general excise taxation under chapter 237, Hawaii Revised Statues.
(b) Any state
general excise tax paid by eligible businesses for grants received from the
federal Restaurant Revitalization Fund shall be refunded to the tax payer, no
later than .
SECTION 3. This Act, upon its approval, shall
apply retroactive to taxable years beginning after March 11, 2021.
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INTRODUCED BY: |
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Report Title:
General Excise Tax; Exemption; COVID-19; Relief Funds; American Rescue Plan Act of 2021; Restaurant Revitalization Fund; Refund
Description:
Establishes that any grants received from the federal Restaurant Revitalization
Fund (RRF) by an
eligible business pursuant to the American Rescue Plan Act of 2021 shall not be
subject to state general
excise tax. Requires any state general excise tax paid by
eligible businesses for RRF grants to be refunded to the tax payer.
Applicable to taxable years beginning after 3/11/2021.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
