REPORT TITLE:
GET; Construction Exemptions


DESCRIPTION:
Exempts from the general excise tax amounts received for
construction related to hotels, time share developments, retail
sales facilities, and resort developments.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.1266       
TWENTIETH LEGISLATURE, 1999                                
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:

 1      SECTION 1.  The legislature finds that Hawaii's economy
 
 2 depends to a large extent upon the health of the visitor
 
 3 industry, which requires continual renewal and revitalization.
 
 4 Hawaii is now being perceived by many in the visitor industry as
 
 5 an aging or mature tourist destination, and that there is an
 
 6 immediate need to change or upgrade the State's image.
 
 7      One way to accomplish this objective is to provide
 
 8 incentives to the visitor industry.  Recently, the State provided
 
 9 tax incentives to hotel owners to upgrade and renovate existing
 
10 hotels.  Tax incentives should be extended to other segments of
 
11 the visitor industry as well.  Since hotel construction has been
 
12 lagging of late, tax incentives will not only provide a much
 
13 needed "shot in the arm" for the construction industry, but would
 
14 also assist the State in its economic recovery as well.
 
15 Incentives would also serve as a catalysis to hesitant out-of-
 
16 state developers who are leery of the State's fiscal situation
 
17 and need support and encouragement from the State to finalize
 
18 their commitment.
 
19      The construction of hotel, time share development, resort
 

 
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 1 development, and other kinds of retail facilities would create
 
 2 and sustain valuable jobs for the State to ultimately stimulate
 
 3 our stagnate economy and bring additional resources and revenues
 
 4 into Hawaii.  The purpose of this Act is to provide tax
 
 5 incentives by way of an exemption from the general excise tax for
 
 6 the construction of hotel, time share project developments,
 
 7 resort developments, and other retail sales projects.
 
 8      SECTION 2.  Chapter 237, Hawaii Revised Statutes, is amended
 
 9 by adding a new section to be appropriately designated and to
 
10 read as follows:
 
11      "�237-    Hotel, time share, resort development, retail
 
12 sales, construction tax exemption.  (a)  There shall be exempt
 
13 from, and excluded from the measure of, the taxes imposed by this
 
14 chapter:
 
15      (1)         per cent of the gross proceeds received from the
 
16           design or qualified construction of a hotel, time share
 
17           project, resort development, or retail sales facility;
 
18           and
 
19      (2)         per cent of the gross proceeds from the sale of
 
20           tangible personal property furnished in conjunction
 
21           with the qualified construction or furnishing of a
 
22           hotel, time share project, resort development, or
 
23           retail sales facility.
 

 
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 1      (b)  For the purposes of this section:
 
 2      "Hotel" means the same as defined under section 486K-1;
 
 3      "Qualified construction" means:
 
 4      (1)  The construction is approved by the director as
 
 5           eligible for the exemption under this section;
 
 6      (2)  A new construction project with all county building
 
 7           permits issued after July 1, 1999; and
 
 8      (3)  In accordance with any rules adopted pursuant to
 
 9           chapter 91 to administer this section.
 
10      "Resort development" means a facility that is primarily
 
11 dedicated to patronizing tourists, that promotes the economic
 
12 development of the State, and other requirements the director may
 
13 impose by rule adopted pursuant to chapter 91.
 
14      "Retail sales facility" means a facility that has at least
 
15      per cent of the square footage in the facility devoted
 
16 exclusively to retail sales businesses.
 
17      "Time-share project" means any construction planned for time
 
18 share use under chapter 514E.
 
19      (c)  The director may require the taxpayer applying for an
 
20 exemption under this section to furnish information to ascertain
 
21 the validity of the exemption claim and may adopt rules pursuant
 
22 to chapter 91 necessary to administer this section.
 
23      (d)  The exemption allowed under this section shall be
 

 
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                                     H.B. NO.1266       
                                                        
                                                        

 
 1 available for amounts received after June 30, 1999, and before
 
 2 July 1, 2003."
 
 3      SECTION 3.  New statutory material is underscored.
 
 4      SECTION 4.  This Act shall take effect on July 1, 1999.
 
 5 
 
 6                           INTRODUCED BY:  _______________________