Report Title:

GET; Nonprofit Organizations; Fundraising Proceeds

Description:

Exempts from the general excise tax amounts received through fundraising as charitable contributions under section 170 of the Internal Revenue Code of 1986, as amended, by a nonprofit organization when the total proceeds received exceed the fair market value of the products or the services donated or provided.

THE SENATE	S.B. NO.	873
TWENTY-FOURTH LEGISLATURE, 2007
STATE OF HAWAII

A BILL FOR AN ACT

relating to taxation.

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

     SECTION 1.  Section 237-23, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:

     "(b)  The exemptions enumerated in subsection (a)(3) to (6) shall apply only:

     (1)  To those persons who shall have registered with the department of taxation by filing a written application for registration in [such] the form [as] that the department shall prescribe, shall have paid the registration fee of $20, and shall have had the exemption allowed by the department or by a court or tribunal of competent jurisdiction upon appeal from any assessment resulting from disallowance of the exemption by the department;

     (2)  To activities from which no profit inures to the benefit of any private stockholder or individual, except for death or other benefits to the members of fraternal societies; and

     (3)  To the fraternal, religious, charitable, scientific, educational, communal, or social welfare activities of such persons, or to the activities of [such] any hospitals, infirmaries, and sanitaria as such, and not to any activity the primary purpose of which is to produce income even though the income is to be used for or in furtherance of the exempt activities of [such] those persons[.]; provided that any portion of the amounts received by those persons from any activity, the primary purpose of which is to produce income and that is a charitable contribution under section 170 (with respect to charitable, etc., contributions and gifts) of the Internal Revenue Code of 1986, as amended, shall not be subject to tax under this chapter."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act shall take effect on July 1, 2007.

INTRODUCED BY:

_____________________________