HOUSE OF REPRESENTATIVES	H.B. NO.	1437
THIRTY-THIRD LEGISLATURE, 2025		H.D. 2
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO GENERAL EXCISE TAX EXEMPTIONS.

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

SECTION 1. The purpose of this Act is to establish a general excise tax exemption on the gross proceeds or gross income received from sales of commodities or services that benefit nonprofit schools.

SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237-    Nonprofit schools; additional amounts not taxable. (a) In addition to the amounts exempt under section 237-24, this chapter shall not apply to the gross proceeds or gross income arising from a sale that benefits a nonprofit school, if the sale is made by either:

(1) A nonprofit school; or

(2) A nonprofit school-sponsored student activity group.

(b) As used in this section:

"Nonprofit school" means an organization that is:

(1) Recognized by the Internal Revenue Service as a charitable organization that is organized and operated exclusively for educational purposes and is exempt from federal taxation under section 501(c)(3) of the Internal Revenue Code of 1986, as amended; and

(2) Registered with and in possession of a tax clearance certificate from the department of taxation and is exempt from the application of this chapter pursuant to section 237-23(a)(4).

"Nonprofit school-sponsored student activity group" means a group connected to and under the control of a nonprofit school. "Nonprofit school-sponsored student activity group" includes:

(1) Student government;

(2) Athletic, math, and debate teams;

(3) Band, orchestra, choir, drama, and other performing groups;

(4) Foreign language clubs;

(5) Honor societies;

(6) Pep squads; and

(7) Other student activity groups that come under the control of the nonprofit school.

"Sale that benefits a nonprofit school" means a sale of a commodity or service from which all proceeds of the sale, less only the actual cost of the commodity or service to the nonprofit school or nonprofit school-sponsored student activity group, are donated to the nonprofit school and are used exclusively to further the nonprofit school's tax exempt purpose."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on January 1, 3000.

Report Title:

General Excise Tax; Exemption; Nonprofit Schools

Description:

Establishes a general excise tax exemption on the gross proceeds or gross income received from sales of commodities or services that benefit nonprofit schools. Effective 1/1/3000. (HD2)

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