REPORT TITLE:
GET; Exemptions


DESCRIPTION:
Exempts from the general excise tax amounts received for products
made with locally produced sugar in lieu of corn syrup.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.940        
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO GENERAL EXCISE TAX.



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

 1      SECTION 1.  The sugar industry in Hawaii has undergone a
 
 2 metamorphasis from a major agricultural product to an active
 
 3 niche market.  Although all of Hawaii's sugar production is
 
 4 currently sent to California to be refined, that is not a
 
 5 permanent arrangement. The freight disadvantage of shipping sugar
 
 6 to California to be refined is being remedied by the construction
 
 7 of a refinery in the State.  The legislature finds that providing
 
 8 incentives for the local consumers to use sugar that is refined
 
 9 locally rather than imported corn syrup for the production of
 
10 Hawaii-made items would benefit and support the State, the
 
11 economy, and the sugar industry.
 
12      The purpose of this Act is to provide an exemption from the
 
13 general excise tax on amounts received for items sold that use
 
14 locally refined sugar rather than imported corn syrup.
 
15      SECTION 2.  Section 237-24.3, Hawaii Revised Statutes, is
 
16 amended to read as follows:
 
17      "§237-24.3  Additional amounts not taxable.  In addition to
 
18 the amounts not taxable under section 237-24, this chapter shall
 
19 not apply to:
 

 
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 1      (1)  Amounts received from the loading, transportation, and
 
 2           unloading of agricultural commodities shipped for a
 
 3           producer or produce dealer on one island of this State
 
 4           to a person, firm, or organization on another island of
 
 5           this State.  The terms "agricultural commodity",
 
 6           "producer", and "produce dealer" shall be defined in
 
 7           the same manner as they are defined in section 147-1;
 
 8           provided that agricultural commodities need not have 
 
 9 been produced in the State;
 
10      (2)  Amounts received from sales of:
 
11           (A)  Intoxicating liquor as the term "liquor" is
 
12                defined in chapter 244D;
 
13           (B)  Cigarettes and tobacco products as defined in
 
14                chapter 245; and
 
15           (C)  Agricultural, meat, or fish products grown,
 
16                raised, or caught in Hawaii, to any person or
 
17                common carrier in interstate or foreign commerce,
 
18                or both, whether ocean-going or air, for
 
19                consumption out-of-state on the shipper's vessels
 
20                or airplanes;
 
21      (3)  Amounts received by the manager or board of directors
 
22           of:
 
23           (A)  An association of apartment owners of a
 

 
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 1                condominium property regime established in
 
 2                accordance with chapter 514A; or
 
 3           (B)  A nonprofit homeowners or community association
 
 4                incorporated in accordance with chapter 415B or
 
 5                any predecessor thereto and existing pursuant to
 
 6                covenants running with the land,
 
 7           in reimbursement of sums paid for common expenses;
 
 8      (4)  Amounts received or accrued from:
 
 9           (A)  The loading or unloading of cargo from ships,
 
10                barges, vessels, or aircraft, whether or not the
 
11                ships, barges, vessels, or aircraft travel between
 
12                the State and other states or countries or between
 
13                the islands of the State;
 
14           (B)  Tugboat services including pilotage fees performed
 
15                within the State, and the towage of ships, barges,
 
16                or vessels in and out of state harbors, or from
 
17                one pier to another; and
 
18           (C)  The transportation of pilots or governmental
 
19                officials to ships, barges, or vessels offshore;
 
20                rigging gear; checking freight and similar
 
21                services; standby charges; and use of moorings and
 
22                running mooring lines;
 
23      (5)  Amounts received by an employee benefit plan by way of
 

 
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                                     H.B. NO.940        
                                                        
                                                        

 
 1           contributions, dividends, interest, and other income;
 
 2           and amounts received by a nonprofit organization or
 
 3           office, as payments for costs and expenses incurred for
 
 4           the administration of an employee benefit plan;
 
 5           provided that this exemption shall not apply to any
 
 6           gross rental income or gross rental proceeds received
 
 7           after June 30, 1994, as income from investments in real
 
 8           property in this State; and provided further that gross
 
 9           rental income or gross rental proceeds from investments
 
10           in real property received by an employee benefit plan
 
11           after June 30, 1994, under written contracts executed
 
12           prior to July 1, 1994, shall not be taxed until the
 
13           contracts are renegotiated, renewed, or extended, or
 
14           until after December 31, 1998, whichever is earlier.
 
15           For the purposes of this paragraph, "employee benefit
 
16           plan" means any plan as defined in section 1002(3) of
 
17           title 29 of the United States Code, as amended;
 
18      (6)  Amounts received for purchases made with United States
 
19           Department of Agriculture food coupons under the
 
20           federal food stamp program, and amounts received for
 
21           purchases made with United States Department of
 
22           Agriculture food vouchers under the Special
 
23           Supplemental Foods Program for Women, Infants and
 

 
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                                     H.B. NO.940        
                                                        
                                                        

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

 
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                                     H.B. NO.940        
                                                        
                                                        

 
 1                and which is sold by the practitioner or which is
 
 2                dispensed and sold by a dealer of prosthetic
 
 3                devices; provided that "prosthetic device" shall
 
 4                not mean any auditory, ophthalmic, dental, or
 
 5                ocular device or appliance, instrument, apparatus,
 
 6                or contrivance;
 
 7      (8)  Taxes on transient accommodations imposed by chapter
 
 8           237D and passed on and collected by operators holding
 
 9           certificates of registration under that chapter;
 
10      (9)  Amounts received as dues by an unincorporated merchants
 
11           association from its membership for advertising media,
 
12           promotional, and advertising costs for the promotion of
 
13           the association for the benefit of its members as a
 
14           whole and not for the benefit of an individual member
 
15           or group of members less than the entire membership;
 
16           [and]
 
17     (10)  Amounts received by a labor organization for real
 
18           property leased to:
 
19           (A)  A labor organization; or
 
20           (B)  A trust fund established by a labor organization
 
21                for the benefit of its members, families, and
 
22                dependents for medical or hospital care, pensions
 
23                on retirement or death of employees,
 

 
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                                     H.B. NO.940        
                                                        
                                                        

 
 1                apprenticeship and training, and other membership
 
 2                service programs.
 
 3           As used in this paragraph, "labor organization" means a
 
 4           labor organization exempt from federal income tax under
 
 5           section 501(c)(5) of the Internal Revenue Code, as
 
 6           amended[.]; and
 
 7     (11)  Amounts received by licensed sellers for products that
 
 8           include sugar refined within the State instead of
 
 9           imported corn syrup."
 
10      SECTION 3.  Statutory material to be repealed is bracketed.
 
11 New statutory material is underscored.
 
12      SECTION 4.  This Act shall take effect on July 1, 1999.
 
13 
 
14                           INTRODUCED BY:  _______________________