REPORT TITLE:
Excise break for new business


DESCRIPTION:
Provides a one-year break from the application of excise tax on
new business.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        2971
HOUSE OF REPRESENTATIVES                H.B. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO GENERAL EXCISE TAX BREAK FOR NEW BUSINESS



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

 1      SECTION 1.  The purpose of this Act is to encourage new
 
 2 businesses by excluding them from excise tax for their first
 
 3 twelve months.
 
 4      SECTION 2.  Section 237-24.3, Hawaii Revised Statutes, is
 
 5 amended to read as follows:
 
 6      "§237-24.3  Additional amounts not taxable.  In addition to
 
 7 the amounts not taxable under section 237-24, this chapter shall
 
 8 not apply to:
 
 9      (1)  Amounts received from the loading, transportation, and
 
10           unloading of agricultural commodities shipped for a
 
11           producer or produce dealer on one island of this State
 
12           to a person, firm, or organization on another island of
 
13           this State.  The terms "agricultural commodity",
 
14           "producer", and "produce dealer" shall be defined in
 
15           the same manner as they are defined in section 147-1;
 
16           provided that agricultural commodities need not have
 
17           been produced in the State;
 

 
 
Page 2                                                     2971
                                     H.B. NO.           
                                                        
                                                        

 
 1      (2)  Amounts received from sales of:
 
 2           (A)  Intoxicating liquor as the term "liquor" is
 
 3                defined in chapter 244D;
 
 4           (B)  Cigarettes and tobacco products as defined in
 
 5                chapter 245; and
 
 6           (C)  Agricultural, meat, or fish products grown,
 
 7                raised, or caught in Hawaii, to any person or
 
 8                common carrier in interstate or foreign commerce,
 
 9                or both, whether ocean-going or air, for
 
10                consumption out-of-state on the shipper's vessels
 
11                or airplanes;
 
12      (3)  Amounts received by the manager or board of directors
 
13           of:
 
14           (A)  An association of apartment owners of a
 
15                condominium property regime established in
 
16                accordance with chapter 514A; or
 
17           (B)  A nonprofit homeowners or community association
 
18                incorporated in accordance with chapter 415B or
 
19                any predecessor thereto and existing pursuant to
 
20                covenants running with the land,
 
21           in reimbursement of sums paid for common expenses;
 

 
 
 
 
 
Page 3                                                     2971
                                     H.B. NO.           
                                                        
                                                        

 
 1      (4)  Amounts received or accrued from:
 
 2           (A)  The loading or unloading of cargo from ships,
 
 3                barges, vessels, or aircraft, whether or not the
 
 4                ships, barges, vessels, or aircraft travel between
 
 5                the State and other states or countries or between
 
 6                the islands of the State;
 
 7           (B)  Tugboat services including pilotage fees performed
 
 8                within the State, and the towage of ships, barges,
 
 9                or vessels in and out of state harbors, or from
 
10                one pier to another; and
 
11           (C)  The transportation of pilots or governmental
 
12                officials to ships, barges, or vessels offshore;
 
13                rigging gear; checking freight and similar
 
14                services; standby charges; and use of moorings and
 
15                running mooring lines;
 
16      (5)  Amounts received by an employee benefit plan by way of
 
17           contributions, dividends, interest, and other income;
 
18           and amounts received by a nonprofit organization or
 
19           office, as payments for costs and expenses incurred for
 
20           the administration of an employee benefit plan;
 
21           provided that this exemption shall not apply to any
 
22           gross rental income or gross rental proceeds received
 
23           after June 30, 1994, as income from investments in real
 

 
Page 4                                                     2971
                                     H.B. NO.           
                                                        
                                                        

 
 1           property in this State; and provided further that gross
 
 2           rental income or gross rental proceeds from investments
 
 3           in real property received by an employee benefit plan
 
 4           after June 30, 1994, under written contracts executed
 
 5           prior to July 1, 1994, shall not be taxed until the
 
 6           contracts are renegotiated, renewed, or extended, or
 
 7           until after December 31, 1998, whichever is earlier.
 
 8           For the purposes of this paragraph, "employee benefit
 
 9           plan" means any plan as defined in section 1002(3) of
 
10           title 29 of the United States Code, as amended;
 
11      (6)  Amounts received for purchases made with United States
 
12           Department of Agriculture food coupons under the
 
13           federal food stamp program, and amounts received for
 
14           purchases made with United States Department of
 
15           Agriculture food vouchers under the Special
 
16           Supplemental Foods Program for Women, Infants and
 
17           Children;
 
18      (7)  Amounts received by a hospital, infirmary, medical
 
19           clinic, health care facility, pharmacy, or a
 
20           practitioner licensed to administer the drug to an
 
21           individual for selling prescription drugs or prosthetic
 
22           devices to an individual; provided that this paragraph
 
23           shall not apply to any amounts received for services
 

 
Page 5                                                     2971
                                     H.B. NO.           
                                                        
                                                        

 
 1           provided in selling prescription drugs or prosthetic
 
 2           devices.  As used in this paragraph:
 
 3           (A)  "Prescription drugs" are those drugs defined under
 
 4                section [[]328-1[]] and dispensed by filling or
 
 5                refilling a written or oral prescription by a
 
 6                practitioner licensed under law to administer the
 
 7                drug and sold by a licensed pharmacist under
 
 8                section 328-16 or practitioners licensed to
 
 9                administer drugs; and
 
10           (B)  "Prosthetic device" means any artificial device or
 
11                appliance, instrument, apparatus, or contrivance,
 
12                including their components, parts, accessories,
 
13                and replacements thereof, used to replace a
 
14                missing or surgically removed part of the human
 
15                body, which is prescribed by a licensed
 
16                practitioner of medicine, osteopathy, or podiatry
 
17                and which is sold by the practitioner or which is
 
18                dispensed and sold by a dealer of prosthetic
 
19                devices; provided that "prosthetic device" shall
 
20                not mean any auditory, ophthalmic, dental, or
 
21                ocular device or appliance, instrument, apparatus,
 
22                or contrivance;
 

 
 
 
Page 6                                                     2971
                                     H.B. NO.           
                                                        
                                                        

 
 1      (8)  Taxes on transient accommodations imposed by chapter
 
 2           237D and passed on and collected by operators holding
 
 3           certificates of registration under that chapter;
 
 4      (9)  Amounts received as dues by an unincorporated merchants
 
 5           association from its membership for advertising media,
 
 6           promotional, and advertising costs for the promotion of
 
 7           the association for the benefit of its members as a
 
 8           whole and not for the benefit of an individual member
 
 9           or group of members less than the entire membership;
 
10           [and]
 
11     (10)  Amounts received by a labor organization for real
 
12           property leased to:
 
13           (A)  A labor organization; or
 
14           (B)  A trust fund established by a labor organization
 
15                for the benefit of its members, families, and
 
16                dependents for medical or hospital care, pensions
 
17                on retirement or death of employees,
 
18                apprenticeship and training, and other membership
 
19                service programs.
 
20           As used in this paragraph, "labor organization" means a
 
21           labor organization exempt from federal income tax under
 
22           section 501(c)(5) of the Internal Revenue Code, as
 
23           amended[.]; and
 

 
Page 7                                                     2971
                                     H.B. NO.           
                                                        
                                                        

 
 1     (11)  Amounts received by a trade or business during the
 
 2           first twelve months of its operation within the State."
 
 3      SECTION 3.  Statutory material to be repealed is bracketed.
 
 4 New statutory material is underscored.
 
 5      SECTION 4.  This Act shall take effect upon its approval.
 
 6 
 
 7                       INTRODUCED BY:  ___________________________