General Excise Tax Exempt.

Exempts from the general excise tax amounts from sales of oil to
public utilities.

HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            

                   A  BILL  FOR  AN  ACT



 1      SECTION 1.  Section 237-24.3, Hawaii Revised Statutes, is
 2 amended to read as follows:
 3      "237-24.3  Additional amounts not taxable.  In addition to
 4 the amounts not taxable under section 237-24, this chapter shall
 5 not apply to:
 6      (1)  Amounts received from the loading, transportation, and
 7           unloading of agricultural commodities shipped for a
 8           producer or produce dealer on one island of this State
 9           to a person, firm, or organization on another island of
10           this State.  The terms "agricultural commodity",
11           "producer", and "produce dealer" shall be defined in
12           the same manner as they are defined in section 147-1;
13           provided that agricultural commodities need not have
14           been produced in the State;
15      (2)  Amounts received from sales of:
16           (A)  Intoxicating liquor as the term "liquor" is
17                defined in chapter 244D;
18           (B)  Cigarettes and tobacco products as defined in
19                chapter 245; and

Page 2                                         1240        
                                     H.B. NO.           

 1           (C)  Agricultural, meat, or fish products grown,
 2                raised, or caught in Hawaii, to any person or
 3                common carrier in interstate or foreign commerce,
 4                or both, whether ocean-going or air, for
 5                consumption out-of-state on the shipper's vessels
 6                or airplanes;
 7      (3)  Amounts received by the manager or board of directors
 8           of:
 9           (A)  An association of apartment owners of a
10                condominium property regime established in
11                accordance with chapter 514A; or
12           (B)  A nonprofit homeowners or community association
13                incorporated in accordance with chapter 415B or
14                any predecessor thereto and existing pursuant to
15                covenants running with the land,
16           in reimbursement of sums paid for common expenses;
17      (4)  Amounts received or accrued from:
18           (A)  The loading or unloading of cargo from ships,
19                barges, vessels, or aircraft, whether or not the
20                ships, barges, vessels, or aircraft travel between
21                the State and other states or countries or between
22                the islands of the State;
23           (B)  Tugboat services including pilotage fees performed

Page 3                                         1240        
                                     H.B. NO.           

 1                within the State, and the towage of ships, barges,
 2                or vessels in and out of state harbors, or from
 3                one pier to another; and
 4           (C)  The transportation of pilots or governmental
 5                officials to ships, barges, or vessels offshore;
 6                rigging gear; checking freight and similar
 7                services; standby charges; and use of moorings and
 8                running mooring lines;
 9      (5)  Amounts received by an employee benefit plan by way of
10           contributions, dividends, interest, and other income;
11           and amounts received by a nonprofit organization or
12           office, as payments for costs and expenses incurred for
13           the administration of an employee benefit plan;
14           provided that this exemption shall not apply to any
15           gross rental income or gross rental proceeds received
16           after June 30, 1994, as income from investments in real
17           property in this State; and provided further that gross
18           rental income or gross rental proceeds from investments
19           in real property received by an employee benefit plan
20           after June 30, 1994, under written contracts executed
21           prior to July 1, 1994, shall not be taxed until the
22           contracts are renegotiated, renewed, or extended, or
23           until after December 31, 1998, whichever is earlier.

Page 4                                         1240        
                                     H.B. NO.           

 1           For the purposes of this paragraph, "employee benefit
 2           plan" means any plan as defined in section 1002(3) of
 3           title 29 of the United States Code, as amended;
 4      (6)  Amounts received for purchases made with United States
 5           Department of Agriculture food coupons under the
 6           federal food stamp program, and amounts received for
 7           purchases made with United States Department of
 8           Agriculture food vouchers under the Special
 9           Supplemental Foods Program for Women, Infants and
10           Children;
11      (7)  Amounts received by a hospital, infirmary, medical
12           clinic, health care facility, pharmacy, or a
13           practitioner licensed to administer the drug to an
14           individual for selling prescription drugs or prosthetic
15           devices to an individual; provided that this paragraph
16           shall not apply to any amounts received for services
17           provided in selling prescription drugs or prosthetic
18           devices.  As used in this paragraph:
19           (A)  "Prescription drugs" are those drugs defined under
20                section [[]328-1[]] and dispensed by filling or
21                refilling a written or oral prescription by a
22                practitioner licensed under law to administer the
23                drug and sold by a licensed pharmacist under

Page 5                                         1240        
                                     H.B. NO.           

 1                section 328-16 or practitioners licensed to
 2                administer drugs; and
 3           (B)  "Prosthetic device" means any artificial device or
 4                appliance, instrument, apparatus, or contrivance,
 5                including their components, parts, accessories,
 6                and replacements thereof, used to replace a
 7                missing or surgically removed part of the human
 8                body, which is prescribed by a licensed
 9                practitioner of medicine, osteopathy, or podiatry
10                and which is sold by the practitioner or which is
11                dispensed and sold by a dealer of prosthetic
12                devices; provided that "prosthetic device" shall
13                not mean any auditory, ophthalmic, dental, or
14                ocular device or appliance, instrument, apparatus,
15                or contrivance;
16      (8)  Taxes on transient accommodations imposed by chapter
17           237D and passed on and collected by operators holding
18           certificates of registration under that chapter;
19      (9)  Amounts received as dues by an unincorporated merchants
20           association from its membership for advertising media,
21           promotional, and advertising costs for the promotion of
22           the association for the benefit of its members as a
23           whole and not for the benefit of an individual member

Page 6                                         1240        
                                     H.B. NO.           

 1           or group of members less than the entire membership;
 2           [and]
 3     (10)  Amounts received by a labor organization for real
 4           property leased to:
 5           (A)  A labor organization; or
 6           (B)  A trust fund established by a labor organization
 7                for the benefit of its members, families, and
 8                dependents for medical or hospital care, pensions
 9                on retirement or death of employees,
10                apprenticeship and training, and other membership
11                service programs.
12           As used in this paragraph, "labor organization" means a
13           labor organization exempt from federal income tax under
14           section 501(c)(5) of the Internal Revenue Code, as
15           amended[.]; and
16     (11)  Amounts received by licensed taxpayers under this
17           chapter from sales of oil to public utilities serving
18           the general public by providing electrical energy."
19      SECTION 2.  Statutory material to be repealed is bracketed.
20 New statutory material is underscored.
21      SECTION 3.  This Act shall take effect on July 1, 1999.
23                              INTRODUCED BY:______________________

Page 7                                         1240        
                                     H.B. NO.