REPORT TITLE:
GET; Prof. Services Exempt


DESCRIPTION:
Exempts gross income and value derived from professional services
resold, consumed, or used wholly outside the State.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           374
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO TAXATION.



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

 1      SECTION 1.  In order to foster Hawaii's economic growth, the
 
 2 legislature finds that encouraging the development and
 
 3 exportation of Hawaii's professional services is in the State's
 
 4 best interest.  The purpose of this Act is to exempt from general
 
 5 excise tax gross income or value derived from the exportation of
 
 6 professional services.
 
 7      SECTION 2.  Chapter 237, Hawaii Revised Statutes, is amended
 
 8 by adding a new section to be appropriately designated and to
 
 9 read as follows:
 
10      "�237-    Exemption for professional services sold out of
 
11 State.  (a)  All of the gross income or value derived from
 
12 professional services performed in Hawaii for an out-of-state
 
13 customer not licensed under this chapter shall be exempted and
 
14 excluded from the measure of taxes imposed by this chapter where:
 
15      (1)  The professional services performed in Hawaii are
 
16           exported and resold, consumed, or used wholly outside
 
17           the State; and
 
18      (2)  The gross income derived from the professional services
 
19           performed would otherwise be subject to taxation at the
 

 
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                                     S.B. NO.           374
                                                        
                                                        

 
 1           highest rate under section 237-13(6), 237-13(8), or
 
 2           equivalent sections imposing the tax at the highest
 
 3           rate upon the gross income derived from the rendering
 
 4           of professional services under this chapter.
 
 5      (b)  For the purposes of this section, the seller or person
 
 6 rendering the professional service exported and resold, consumed,
 
 7 or used outside the State shall take from the purchaser, a
 
 8 certificate (or an equivalent), executed in the form and manner
 
 9 that the department of taxation prescribes, certifying that the
 
10 professional service purchased is to be resold, consumed, or used
 
11 outside the State.
 
12      (c)  For the purposes of this section "professional
 
13 services" means those services within the scope of the practice
 
14 of architecture, landscape architecture, professional
 
15 engineering, land surveying, real property appraisal, law,
 
16 medicine, accounting, dentistry, public finance bond
 
17 underwriting, public finance bond investment banking, or any
 
18 other practice defined as professional by the laws of this State
 
19 or the professional and scientific occupation series contained in
 
20 the United States Office of Personnel Management's Qualifications
 
21 Standards Handbook."
 
22      SECTION 3.  New statutory material is underscored.
 
23      SECTION 4.  This Act shall take effect on July 1, 1999, and
 

 
Page 3                                                     
                                     S.B. NO.           374
                                                        
                                                        

 
 1 shall apply to gross proceeds or gross income received after
 
 2 June 30, 1999.
 
 3 
 
 4                           INTRODUCED BY:  _______________________