HOUSE OF REPRESENTATIVES	H.B. NO.	311
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO KALO FARMING.

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

SECTION 1. The legislature finds that kalo (Colocasia esculenta), the Hawaiian word for taro, is known for its history, cultural significance, and cultivation in Hawaii. Kalo in and of itself is a highly nutritious and versatile plant that can be grown in or out of water, has a plethora of species, and is biodiverse. Kalo is also Hawaii's state plant.

The legislature also finds that kalo farming is a practice that has been integral to the Hawaiian islands for centuries and has provided an abundance of food and ecological health. Kalo is a food that is adapted to Hawaii's environment and can grow well in the State.

However, the legislature finds that there has been a decline in the number of kalo farmers and kalo sales in recent history due to low returns for these farmers and an over-reliance on foods and crops from outside the State that are not conducive to cultivation and production in Hawaii. The legislature finds that kalo farming shows promise for the State to achieve a more sustainable lifestyle and food independence, expand the local market, and enhance health and well-being for residents.

While many states provide agricultural sales tax exemptions for machinery, fuel, fertilizer, pesticides, seed, animals, and feed, the legislature finds that Hawaii provides only a fuel tax exemption for fuel used for agricultural equipment and under certain conditions. Providing a tax exemption for Hawaii farmers, similar to that of other states, can help spur economic growth and provide economic incentives for existing and new kalo farmers. Creating financial incentives for kalo farmers supports a stronger agricultural economy and benefits farmers in the State.

The purpose of this Act is to establish a general excise tax exemption on the gross proceeds arising from the sale of machinery, fuel, chemicals, seed, animals, and feed to a qualified farmer and directly related to the qualified farmer's kalo farming operations.

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

"§237-    Exemption for certain purchases related to kalo farming operations. (a) There shall be exempted from, and excluded from the measure of, the taxes imposed by this chapter on all of the gross proceeds arising from the sale of machinery, fuel, chemicals, seed, huli, animals, or feed to a qualified farmer and directly related to the qualified farmer's kalo farming operations.

(b) The director of taxation shall prepare forms as may be necessary to claim a tax exemption under this section.

(c) The director of taxation may adopt rules pursuant to chapter 91 for the purposes of this section.

(d) For the purposes of this section:

"Kalo" means taro (Colocasia esculenta).

"Qualified farmer" means a person who conducts kalo farming operations in the State and has:

(1) An annual gross income for the preceding income tax year of $10,000 or more from kalo farming operations; or

(2) An average annual gross income for the three preceding income tax years of $10,000 or more from kalo farming operations."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2023.

INTRODUCED BY:

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Report Title:

Kalo Farming Operations; General Excise Tax Exemption

Description:

Establishes a GET exemption for the gross proceeds from the sale of machinery, fuel, chemicals, seed, huli, animals, or feed to a qualified farmer and directly related to the qualified farmer's kalo farming operations.

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.