Category Archives: General Excise (HRS 237)

SB 2514, CD-1

SUBJECT:  GENERAL EXCISE, Sellers Without Physical Presence; Economic Nexus

BILL NUMBER:  SB 2514, CD-1

INTRODUCED BY:  Conference Committee

EXECUTIVE SUMMARY:  States that the seller with more than $100,000 in in-state sales or 200 transactions into the state shall be deemed to be doing business in the state for purposes of the GET law.  This provision is similar to South Dakota legislation now being challenged in the U.S. Supreme Court in South Dakota v. Wayfair, Inc., No. 17-494 (U.S., argued Apr. 17, 2018).

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HB 2748, CD-1

SUBJECT:  GENERAL EXCISE, Expand and Extend Affordable Rental Housing Exemption

BILL NUMBER:  HB 2748, CD-1

INTRODUCED BY:  Conference Committee

EXECUTIVE SUMMARY:  Also known as the “Bob Nakata Act.”  Part II of the bill expands and extends to June 30, 2026, the affordable housing exemption from general excise tax and use tax costs for certain rental housing projects pursuant to section 201H-36(a)(5), Hawaii Revised Statutes.  Requires affordable rental project owners to accept Section 8 Housing Choice Vouchers as a condition of certification.

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HB 2462, HD-1, SD-1

SUBJECT:  GENERAL EXCISE, Exemption for Farm Equipment Purchased by a Producer

BILL NUMBER:  HB 2462, HD-1, SD-1

INTRODUCED BY:  Senate Committee on Agriculture and Environment

SYNOPSIS:  Adds a new section to HRS chapter 237 which would exempt from the GET all gross proceeds arising from the sale of farm equipment and machinery to a producer, provided that the producer’s gross income for the previous taxable year, as evidenced by the producer’s income tax return for that year, does not exceed $200,000.

Defines “farm equipment and machinery” as any implement, tool, machine, equipment, appliance, device, or apparatus used in the conduct of agricultural operations, except:  (1) property used for administration, management, or marketing of an agricultural operation; (2) supply items such as shop towels, cleaning agents such as hand cleaners and solvents, and agricultural chemicals; (3) articles of clothing, except for clothing designed to protect an agricultural product or that is required by law when applying chemicals; and (4) items purchased for the purpose of resale.

Directs the department of taxation to adopt rules under HRS chapter 91 to implement this section.

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SB 2890, SD-2

SUBJECT:  GENERAL EXCISE, Define Doing Business Without Physical Presence; Attribution from Marketplace Provider

BILL NUMBER:  SB 2890, SD-2

INTRODUCED BY:  Senate Committee on Ways and Means

EXECUTIVE SUMMARY:  This is an attempt to adopt a form of “economic nexus,” namely a statement that substantial sales in a state give rise to a sufficient connection between the state and the seller to enable that state to impose sales tax or use tax collection obligations.  While the measure may be subject to constitutional challenge, it is in line with other states’ measures increasing pressure on remote sellers to collect and remit sales and use taxes owed on purchases by customers in the state.

Also states that a person who sells or assists in the sale of tangible personal property, provides customer service, processes payments, and controls the fulfillment process is a “seller” rather than a “representative,” and therefore has primary liability for the GET.  We advise caution because some of the terms in this definition are not tightly defined, are not internally consistent, and could have ramifications beyond the intended targets.

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HB 2605, HD-2, SD-1

SUBJECT:  GENERAL EXCISE, TRANSIENT ACCOMMODATIONS, MISCELLANEOUS, Transient Accommodations Brokers as Tax Collection Agents; Amnesty

BILL NUMBER:  HB 2605, HD-2, SD-1

INTRODUCED BY:  Senate Committees on Economic Development, Tourism, and Technology and Public Safety, Intergovernmental, and Military Affairs

EXECUTIVE SUMMARY:  Allows a transient accommodations broker to serve as a collection agent for general excise and transient accommodations taxes.  This type of arrangement would probably enhance collection of taxes because of the difficulty of policing individual owners.  However, the number of caveats, conditions, and restrictions that are placed on the broker signing up for this program is so large that it is unlikely that any broker in its right mind would sign up.  If no broker is motivated to sign up, this legislation will accomplish nothing.

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HB 2330, HD-1, SD-1

SUBJECT:  GENERAL EXCISE, Expand and Extend Affordable Rental Housing Exemption

BILL NUMBER:  HB 2330, HD-1, SD-1

INTRODUCED BY:  Senate Committee on Housing

EXECUTIVE SUMMARY:  Expands and extends to June 30, 2026, the affordable housing exemption from general excise tax and use tax costs for certain rental housing projects pursuant to section 201H-36(a)(5), Hawaii Revised Statutes.  Requires affordable rental project owners to accept Section 8 Housing Choice Vouchers as a condition of certification.

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HB 2007, HD-1, SD-1

SUBJECT:  GENERAL EXCISE, Exemption for Aircraft Repair and Maintenance

BILL NUMBER:  HB 2007, HD-1, SD-1

INTRODUCED BY:  Senate Committee on Transportation & Energy

EXECUTIVE SUMMARY:  The stated purpose of the bill is to create equity among the types of available aircraft by broadening the exemption for aircraft repairs and maintenance to encompass all aircraft.  The current structure leaves the impression that big business skates by where small business is left behind.

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