HOUSE OF REPRESENTATIVES

H.B. NO.

2877

TWENTY-FIFTH LEGISLATURE, 2010

H.D. 1

STATE OF HAWAII

Proposed

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

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

 


     SECTION 1.  The purpose of this Act is to temporarily suspend the general excise tax exemption for certain amounts received by certain persons and, instead, require those persons to pay the general excise tax on those amounts at the one-half per cent rate.

     SECTION 2.  Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§237-A  Temporary suspension of exemption of certain amounts; levy of tax at one-half per cent rate.  (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, 2010, through June 30, 2015:

     (1)  Amounts received by Hansen's disease patients and kokuas with respect to business within the county of Kalawao as described under section 237-23(a)(8);

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

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

     (4)  Gross receipts of home service providers acting as service carriers for other home service providers as described under section 237-13(6)(D);

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

     (6)  Amounts received, charged, or attributable to services furnished by related entities or the imputed or stated interests of related entities as described under section 237-23.5(a);

     (7)  Amounts received by common paymasters and disbursed as employee compensation or benefits as described under section 237-23.5(b);

     (8)  Moneys received by foster parents as described under section 237-24(15);

     (9)  Amounts received by cooperative housing corporations from shareholders as reimbursement for expenses as described under section 237-24(16);

    (10)  Amounts received by managers, submanagers, or boards of directors of condominium property regime owner, nonprofit homeowner, or nonprofit community associations as described under section 237-24.3(3) in the form in which it existed on July 1, 2010;

    (11)  Amounts received by employee benefit plans by way of dividends, interest, and other income as described under section 237-24.3(5); provided that employee and employer contributions to employee benefit plans shall continue to be exempt from taxation under this section;

    (12)  Amounts received by nonprofit organizations or offices for the administration of employee benefit plans as described under section 237-24.3(5);

    (13)  Amounts received by hotel operators or suboperators and disbursed for employee compensation and benefits as described under section 237-24.7(1) in the form in which it existed on July 1, 2010;

    (14)  Amounts received by county transportation system operators as described under section 237-24.7(2); provided that subsidies or grants from the federal and county governments shall continue to be exempt from taxation under this section;

    (15)  Amounts received by orchard property operators and disbursed for employee compensation and benefits as described under section 237-24.7(4);

    (16)  Amounts received by management companies from related telecommunications services common carriers and disbursed for employee compensation and benefits as described under section 237-24.7(9);

    (17)  Amounts received by the Hawaii convention center operator as reimbursements of costs or advances as described under section 237-24.75(2);

    (18)  Amounts received by professional employment organizations from client companies and disbursed for employee benefits and compensation as described under section 237-24.75(3);

    (19)  Amounts received by financial institutions, trust companies, and trust departments as described under section 237-24.8;

    (20)  Gross proceeds received from the sale of tangible personal property to the United States and state-chartered credit unions as described under section 237-25(a)(3);

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

    (22)  Gross income received from the planning, design, financing, construction, sale, or lease of affordable housing projects, as described under section 237-29(a), that do not have valid certificates of exemption or approval under section 201H-36 on the effective date of this Act;

    (23)  Gross income received by nonprofit or limited distribution mortgagors for low- and moderate-income housing projects, as described under section 237-29(b), that were not certified or approved under section 201H-36 on or before the effective date of this Act; and

    (24)  Gross proceeds or gross income received from the sale of tangible personal property imported for subsequent resale at wholesale as described under section 237-29.55.

     (b)  There is levied, assessed, and collected annually against the persons, organizations, or amounts exempted under subsection (a), a tax at the rate of one-half per cent on the previously exempt gross income or gross proceeds of sale.

     "Previously exempt gross income or gross proceeds of sale" means the amount of the gross income or gross proceeds of sale, the exemption for which is suspended under subsection (a).

     The persons, organizations, or amounts exempted under subsection (a), against whom the tax is levied and assessed under this section shall be responsible for payment of the tax to the director of taxation.

     (c)  The provisions of this chapter shall apply to the payment, collection, enforcement, and appeal of the tax levied under this section.

     The director may establish additional requirements, procedures, and forms pursuant to rules adopted under chapter 91, to effectuate this section."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect on July 1, 2010; provided that:

     (1)  The suspension under section 237-34(15) and (16), Hawaii Revised Statutes, shall not be repealed when that section is reenacted on December 31, 2013, pursuant to Act 70, Session Laws of Hawaii 2009;

     (2)  The suspension under section 237-24.3(3) and 237-24.7(1), Hawaii Revised Statutes, shall not be repealed when those sections are reenacted on December 31, 2010, pursuant to Act 196, Session Laws of Hawaii 2009;

     (3)  Section 2 shall be repealed on June 30, 2015; and

     (4)  This Act shall apply to taxable years beginning after December 31, 2009 and ending before January 1, 2016.



 

Report Title:

General Excise Tax; Temporary Suspension; Exemption For Certain Amounts

 

Description:

Temporarily suspends the exemption for certain amounts of gross income or proceeds from the general excise tax and requires the payment of the tax at a one-half per cent rate.  Takes effect on 07/01/2010 and is repealed on 06/30/2015.

 

 

 

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