Bill Text: HI SB953 | 2014 | Regular Session | Introduced

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Bill Title: Taxation; General Excise Tax; Exemptions; Repeal

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced - Dead) 2013-12-18 - Carried over to 2014 Regular Session. [SB953 Detail]

Download: Hawaii-2014-SB953-Introduced.html

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THE SENATE	S.B. NO.	953
TWENTY-SEVENTH LEGISLATURE, 2013
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Act 105, Session Laws of Hawaii 2011, temporarily suspended certain exemptions from the general excise tax for a period of two years, and these exemptions are scheduled to be restored on June 30, 2013.  One of the suspended exemptions is for the general excise tax imposed on tangible personal property that is sold by a person licensed under chapter 237, Hawaii Revised Statutes, to the United States and to any state-chartered credit union, pursuant to section 237‑25(a)(3), Hawaii Revised Statutes.  The legislature finds that a consequence of not providing the exemption is that Hawaii businesses that sell tangible personal property to the federal government must pay the general excise tax on those goods but cannot pass the amount of the tax on to the federal government, which in effect creates a financial burden for state businesses and puts them at a disadvantage when competing with out-of-state businesses.

     Rather than crippling local businesses, the legislature finds that Hawaii needs to promote the growth of local businesses, including businesses that sell goods to the federal government, which tends to make large purchases from local vendors.

     The purpose of this Act is to restore the general excise tax exemption for sales of tangible personal property to the United States and state-chartered credit unions, pursuant to section 237-25(a)(3), and to clarify the exemption under existing law to facilitate greater use of the exemption.

     SECTION 2.  Act 105, Session Laws of Hawaii 2011, section 2 is amended by amending subsection (a) of section 237-  , Hawaii Revised Statutes, relating to temporary suspension of exemption of certain amounts; levy of tax, to read as follows:

     "(a)  Notwithstanding any other law to the contrary, the exemption of the following amounts from taxation under this chapter shall be suspended from July 1, 2011, through June 30, 2013:

     (1)  Amounts deducted from the gross income received by contractors as described under section 237-13(3)(B);

     (2)  Reimbursements received by federal cost-plus contractors for the costs of purchased materials, plant, and equipment as described under section 237‑13(3)(C);

     (3)  Gross receipts of home service providers acting as service carriers providing mobile telecommunications services to other home service providers as described under section 237-13(6)(D);

     (4)  Amounts deducted from the gross income of real property lessees because of receipt from sublessees as described under section 237-16.5;

     (5)  The value or gross income received by nonprofit organizations from certain conventions, conferences, trade show exhibits, or display spaces as described under section 237-16.8;

     (6)  Amounts received by sugarcane producers as described under section 237-24(14);

     (7)  Amounts received from the loading, transportation, and unloading of agricultural commodities shipped interisland as described under section 237-24.3(1);

     (8)  Amounts received from the sale of intoxicating liquor, cigarettes and tobacco products, and agricultural, meat, or fish products to persons or common carriers engaged in interstate or foreign commerce as described under section 237-24.3(2);

     (9)  Amounts received or accrued from the loading or unloading of cargo as described under section 237‑24.3(4)(A);

    (10)  Amounts received or accrued from tugboat and towage services as described under section 237-24.3(4)(B);

    (11)  Amounts received or accrued from the transportation of pilots or government officials and other maritime-related services as described under section 237‑24.3(4)(C);

    (12)  Amounts received by labor organizations for real property leases as described under section 237‑24.3(10);

    (13)  Amounts received as rent for aircraft or aircraft engines used for interstate air transportation as described under section 237-24.3(12);

    (14)  Amounts received by exchanges and exchange members as described under section 237-24.5;

    (15)  Amounts received as high technology research and development grants under section 206M-15 as described under section 237-24.7(10);

    (16)  Amounts received from the servicing and maintenance of aircraft or construction of aircraft service and maintenance facilities as described under section 237‑24.9;

    (17)  Gross proceeds from the sale of the following:

         (A)  Intoxicating liquor to the United States (including any agency or instrumentality of the United States that is wholly owned or otherwise so constituted as to be immune from the levy of a tax under chapter 238 or 244D, but not including national banks) or any organization to which the sale is permitted by the proviso of "Class 3" of section 281-31 that is located on any Army, Navy, or Air Force reservation as described under section 237-25(a)(1); and

         (B)  Tobacco products and cigarettes to the United States (including any agency or instrumentality thereof that is wholly owned or otherwise so constituted as to be immune from the levy of tax under chapter 238 or 245, but not including national banks) as described under section 237‑25(a)(2); [and

         (C)  "Other tangible personal property" to the United States (including any agency, instrumentality, or federal credit union thereof, but not including national banks) and any state-chartered credit union as described under section 237-25(a)(3);]

    (18)  Amounts received by petroleum product refiners from other refiners for further refining of petroleum products as described under section 237-27;

    (19)  Gross proceeds received from the construction, reconstruction, erection, operation, use, maintenance, or furnishing of air pollution control facilities, as described under section 237-27.5, that do not have valid certificates of exemption on July 1, 2011;

    (20)  Gross proceeds received from shipbuilding and ship repairs as described under section 237-28.1;

    (21)  Amounts received by telecommunications common carriers from call center operators for interstate or foreign telecommunications services as described under section 237-29.8;

    (22)  Gross proceeds received by qualified businesses in enterprise zones, as described under section 209E-11, that do not have valid certificates of qualification from the department of business, economic development, and tourism on July 1, 2011; and

    (23)  Gross proceeds received by contractors licensed under chapter 444 for construction within enterprise zones performed for qualified businesses within the enterprise zones or businesses approved by the department of business, economic development, and tourism to enroll into the enterprise zone program, as described under section 209E-11."

     SECTION 3.  Section 237-25, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  Nothing in this section shall be deemed to exempt any person engaging or continuing in a service business or calling from any part of the tax imposed upon the person for such activity, and the person shall not be entitled to deduct any amount for tangible personal property furnished in conjunction therewith [even though] unless the person separately bills or otherwise shows the amount of the gross income of the business derived from the furnishing of the property."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

 

INTRODUCED BY:	_____________________________

 

 

Report Title:

Taxation; General Excise Tax; Exemptions; Repeal

 

Description:

Repeals the temporary suspension under Act 105, SLH 2011, on the general excise tax exemption on sales of tangible personal property sold to the federal government and state-chartered credit unions.  Authorizes a general excise tax deduction for tangible personal property furnished in conjunction with engaging in or continuing in a service business or calling, if the person separately bills or otherwise shows the amount of the gross income of the business derived from the furnishing of the property.

 

 

 

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