HB625

HOUSE OF REPRESENTATIVES	H.B. NO.	625
THIRTY-SECOND LEGISLATURE, 2023
STATE OF HAWAII

A BILL FOR AN ACT

Relating to the General excise tax.

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

SECTION 1. The legislature finds that Hawaii taxpayers are

some of the most overburdened taxpayers in the nation. This

burden is most severe when consumers are taxed on critical items

needed for basic life functions. Several states, including Alabama, Connecticut, Florida, Georgia, Illinois, Iowa, Louisiana, Maryland, Missouri, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Vermont, and Virginia, have temporary state sales tax holidays. A general

excise tax holiday would allow for the citizens of this State to retain more of their money to spend in more beneficial ways. A tax holiday on the sale of school supplies would have the effect of stimulating retail sales and would help consumers and

retailers alike.

The legislature further recognizes that the State levies a

general excise tax on businesses, rather than a state sales tax on consumers. The purpose of this Act is to authorize a state

general excise tax holiday in the State prior to the start of the school year on the condition that businesses pass the savings on to consumers.

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

"§237- GET tax holiday. (a) Notwithstanding any law to the contrary, taxes under this chapter shall not be due on the sale of any purchases under $2,000 if the sale takes place annually during the period beginning at 12:01 a.m. on the last Friday in July and ending at 11:59 p.m. of the Sunday immediately following that Friday; provided that all savings generated by this section shall be passed on by the seller to the purchaser without any increase in price.

(1) The tax exemptions provided in this section do not apply to sales on any age-restricted products such as tobacco and alcohol.

(2) The tax exemptions provided in this section do not apply to sales within an airport as defined in HRS §261-1, Hawaii Revised Statutes.

(3) The exemption provided in this section shall not apply to:

(A) Rebates, layaway sales, rain checks, or exchanges when the transactions occur before or after the tax holiday period; or

(B) Sales on items that will be resold in any manner; or

(D) The rental of goods or services; or

(E) Taxable services performed on retail items.

(4) The exemption provided in this section shall apply only to businesses operating with a general excise tax license from the department.

(A) Multiple articles that are normally sold as a collective unit shall continue to be sold in that manner and shall not be priced separately and sold as individual items to qualify for the exemption.

(B) Shipping and handling charges shall be included as part of the sales price of the item.

(C) A retailer shall not be required to obtain any special license, permit, or other documentation of sales during the exemption holiday period; provided that the retailer has a general excise tax license; provided further that the retailer’s records shall clearly identify the type of item sold, the date the item was sold, and the sales price of the item.

(D) A retailer may offer a discount to reduce the retail sales price of an item; provided that if the discount reduces the retail sales price of an item to $2,000 or less, the item shall qualify for the exemption.

(E) The total retail sales price of items advertised as "buy one, get one free" or "buy one, get one for a reduced price," shall not be averaged for both items to qualify for the exemption.

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________