Avalara Taxrates > Blog > Sales Tax News > Hawaii: Temporary Suspension of Exemptions to Expire June 30, 2013 - Avalara

Hawaii: Temporary Suspension of Exemptions to Expire June 30, 2013


 Hawaii to reinstate numerous exemptions, beginning July 1, 2013.

Two years ago, in June 2011, Hawaii Governor Neil Abercrombie (D) signed a law that temporarily suspended many general excise tax (GE tax) and use tax exemptions, deductions and exclusions. Under Act 105, Session Laws of Hawaii 2011, those taxes were subject to the state rate of 4%. Act 105 also created information reporting obligations on those exemptions, deductions and exclusions. On June 30, 2013, Act 105 sunsets.

Beginning July 1, 2013, therefore, the GE and use tax exemptions, exclusions and deductions created under Act 105 will be back in place. 

Reinstated exemptions from the GE tax include, but are not limited to:

  • "Amounts deducted from the gross income received by contractors as described under section 237-13(3)(B);
  • Amounts received by sugarcane producers as described under section 237-24(14);" and
  • Gross proceeds from the sale of intoxicating liquor, tobacco products and cigarettes, and other tangible personal property to the United States or certain other organizations…;

Reinstated exemptions from the use tax include, but are not limited to:

  • "The use of oceangoing vehicles for passenger or passenger and goods transportation from one point to another within the State as a public utility, as described under paragraph (7) of the definition of "use" in section 238-1;
  • The use of material, parts, or tools imported or purchased by a person licensed under chapter 237 that are used for aircraft service and maintenance or the construction of an aircraft service and maintenance facility, as described under paragraph (8) of the definition of "use" in section 238-1; and
  • The use of any vessel constructed under section 189-25 prior to July 1, 1969, as described under section 238-3(h)."

The Hawaii Department of Taxation has released an announcement relating to the sunset of Act 105. It lists the exemptions, deductions and exclusions suspended under Act 105. Grandfathering guidelines and accounting methods are also provided.

How does your business keep track of sales and use tax changes?

Get Free Tax Rate Tables

Hawaii State Rates

 


Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Gail Cole
Avalara Author
Gail Cole
Gail Cole
Avalara Author Gail Cole
Gail began researching and writing about sales tax in 2012 and has been fascinated with it ever since. She has a penchant for uncovering unusual tax facts, and endeavors to make complex sales tax laws more digestible for both experts and laypeople.