Hawaii: Temporary Suspension of Exemptions to Expire June 30, 2013
- Jun 10, 2013 | Gail Cole
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.
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