REPORT TITLE:
Taxation


DESCRIPTION:
Exempts from GET amounts received from foreign diplomats and
consular officials.  Exempts from TAT accommodations furnished to
foreign diplomats and consular officials.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
HOUSE OF REPRESENTATIVES                H.B. NO.1691       
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
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                   A  BILL  FOR  AN  ACT

RELATING TO TAXATION.



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

 1      SECTION 1.  Section 237-24.3, Hawaii Revised Statutes, is
 
 2 amended to read as follows:
 
 3      "237-24.3  Additional amounts not taxable.  In addition to
 
 4 the amounts not taxable under section 237-24, this chapter shall
 
 5 not apply to:
 
 6      (1)  Amounts received from the loading, transportation, and
 
 7           unloading of agricultural commodities shipped for a
 
 8           producer or produce dealer on one island of this State
 
 9           to a person, firm, or organization on another island of
 
10           this State.  The terms "agricultural commodity",
 
11           "producer", and "produce dealer" shall be defined in
 
12           the same manner as they are defined in section 147-1;
 
13           provided that agricultural commodities need not have
 
14           been produced in the State;
 
15      (2)  Amounts received from sales of:
 
16           (A)  Intoxicating liquor as the term "liquor" is
 
17                defined in chapter 244D;
 
18           (B)  Cigarettes and tobacco products as defined in
 
19                chapter 245; and
 

 
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 1           (C)  Agricultural, meat, or fish products grown,
 
 2                raised, or caught in Hawaii, to any person or
 
 3                common carrier in interstate or foreign commerce,
 
 4                or both, whether ocean-going or air, for
 
 5                consumption out-of-state on the shipper's vessels
 
 6                or airplanes;
 
 7      (3)  Amounts received by the manager or board of directors
 
 8           of:
 
 9           (A)  An association of apartment owners of a
 
10                condominium property regime established in
 
11                accordance with chapter 514A; or
 
12           (B)  A nonprofit homeowners or community association
 
13                incorporated in accordance with chapter 415B or
 
14                any predecessor thereto and existing pursuant to
 
15                covenants running with the land,
 
16           in reimbursement of sums paid for common expenses;
 
17      (4)  Amounts received or accrued from:
 
18           (A)  The loading or unloading of cargo from ships,
 
19                barges, vessels, or aircraft, whether or not the
 
20                ships, barges, vessels, or aircraft travel between
 
21                the State and other states or countries or between
 
22                the islands of the State;
 

 
 
 
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 1           (B)  Tugboat services including pilotage fees performed
 
 2                within the State, and the towage of ships, barges,
 
 3                or vessels in and out of state harbors, or from
 
 4                one pier to another; and
 
 5           (C)  The transportation of pilots or governmental
 
 6                officials to ships, barges, or vessels offshore;
 
 7                rigging gear; checking freight and similar
 
 8                services; standby charges; and use of moorings and
 
 9                running mooring lines;
 
10      (5)  Amounts received by an employee benefit plan by way of
 
11           contributions, dividends, interest, and other income;
 
12           and amounts received by a nonprofit organization or
 
13           office, as payments for costs and expenses incurred for
 
14           the administration of an employee benefit plan;
 
15           provided that this exemption shall not apply to any
 
16           gross rental income or gross rental proceeds received
 
17           after June 30, 1994, as income from investments in real
 
18           property in this State; and provided further that gross
 
19           rental income or gross rental proceeds from investments
 
20           in real property received by an employee benefit plan
 
21           after June 30, 1994, under written contracts executed
 
22           prior to July 1, 1994, shall not be taxed until the
 
23           contracts are renegotiated, renewed, or extended, or
 

 
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 1           until after December 31, 1998, whichever is earlier.
 
 2           For the purposes of this paragraph, "employee benefit
 
 3           plan" means any plan as defined in section 1002(3) of
 
 4           title 29 of the United States Code, as amended;
 
 5      (6)  Amounts received for purchases made with United States
 
 6           Department of Agriculture food coupons under the
 
 7           federal food stamp program, and amounts received for
 
 8           purchases made with United States Department of
 
 9           Agriculture food vouchers under the Special
 
10           Supplemental Foods Program for Women, Infants and
 
11           Children;
 
12      (7)  Amounts received by a hospital, infirmary, medical
 
13           clinic, health care facility, pharmacy, or a
 
14           practitioner licensed to administer the drug to an
 
15           individual for selling prescription drugs or prosthetic
 
16           devices to an individual; provided that this paragraph
 
17           shall not apply to any amounts received for services
 
18           provided in selling prescription drugs or prosthetic
 
19           devices.  As used in this paragraph:
 
20           (A)  "Prescription drugs" are those drugs defined under
 
21                section [[]328-1[]] and dispensed by filling or
 
22                refilling a written or oral prescription by a
 
23                practitioner licensed under law to administer the
 

 
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 1                drug and sold by a licensed pharmacist under
 
 2                section 328-16 or practitioners licensed to
 
 3                administer drugs; and
 
 4           (B)  "Prosthetic device" means any artificial device or
 
 5                appliance, instrument, apparatus, or contrivance,
 
 6                including their components, parts, accessories,
 
 7                and replacements thereof, used to replace a
 
 8                missing or surgically removed part of the human
 
 9                body, which is prescribed by a licensed
 
10                practitioner of medicine, osteopathy, or podiatry
 
11                and which is sold by the practitioner or which is
 
12                dispensed and sold by a dealer of prosthetic
 
13                devices; provided that "prosthetic device" shall
 
14                not mean any auditory, ophthalmic, dental, or
 
15                ocular device or appliance, instrument, apparatus,
 
16                or contrivance;
 
17      (8)  Taxes on transient accommodations imposed by chapter
 
18           237D and passed on and collected by operators holding
 
19           certificates of registration under that chapter;
 
20      (9)  Amounts received as dues by an unincorporated merchants
 
21           association from its membership for advertising media,
 
22           promotional, and advertising costs for the promotion of
 
23           the association for the benefit of its members as a
 

 
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 1           whole and not for the benefit of an individual member
 
 2           or group of members less than the entire membership;
 
 3           [and]
 
 4     (10)  Amounts received by a labor organization for real
 
 5           property leased to:
 
 6           (A)  A labor organization; or
 
 7           (B)  A trust fund established by a labor organization
 
 8                for the benefit of its members, families, and
 
 9                dependents for medical or hospital care, pensions
 
10                on retirement or death of employees,
 
11                apprenticeship and training, and other membership
 
12                service programs.
 
13           As used in this paragraph, "labor organization" means a
 
14           labor organization exempt from federal income tax under
 
15           section 501(c)(5) of the Internal Revenue Code, as
 
16           amended[.]; and 
 
17     (11)  Amounts received from foreign diplomats and consular
 
18           officials who are holding cards issued or authorized by
 
19           the United States Department of State granting them an
 
20           exemption from state taxes."
 
21      SECTION 2.  Section 237D-3, Hawaii Revised Statutes, is
 
22 amended to read as follows:
 

 
 
 
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                                     H.B. NO.1691       
                                                        
                                                        

 
 1      "237D-3 Exemptions.  This chapter shall not apply to:
 
 2      (1)  Health care facilities including all such facilities
 
 3           enumerated in section 321-11(10)[.];
 
 4      (2)  School dormitories of a public or private educational
 
 5           institution providing education in grades kindergarten
 
 6           through twelve, or of any institution of higher
 
 7           education[.];
 
 8      (3)  Lodging provided by nonprofit corporations or
 
 9           associations for religious, charitable, or educational
 
10           purposes; provided that this exemption shall apply only
 
11           to the activities of the religious, charitable, or
 
12           educational corporation or association as such and not
 
13           to any rental or gross rental the primary purpose of
 
14           which is to produce income even if the income is used
 
15           for or in furtherance of the exempt activities of such
 
16           religious, charitable, or educational corporation or
 
17           association[.];
 
18      (4)  Living accommodations for persons in the military on
 
19           permanent duty assignment to Hawaii, including the
 
20           furnishing of transient accommodations to those
 
21           military personnel who receive temporary lodging
 
22           allowances while seeking accommodations in Hawaii or
 
23           while awaiting reassignment to new duty stations
 
24           outside the State[.];
 

 
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 1      (5)  Low-income renters receiving rental subsistence from
 
 2           the state or federal governments and whose rental
 
 3           periods are for durations shorter than sixty days[.];
 
 4      (6)  Operators of transient accommodations who furnish
 
 5           accommodations to full-time students enrolled in an
 
 6           institution offering post-secondary education.  The
 
 7           director of taxation shall determine what shall be
 
 8           deemed acceptable proof of full-time enrollment.  This
 
 9           exemption shall also apply to operators who furnish
 
10           transient accommodations to students during summer
 
11           employment[.];
 
12      (7)  Accommodations furnished without charge such as, but
 
13           not limited to, complimentary accommodations,
 
14           accommodations furnished to contract personnel such as
 
15           physicians, golf or tennis professionals, swimming and
 
16           dancing instructors, and other personnel to whom no
 
17           salary is paid or to employees who receive room and
 
18           board as part of their salary or compensation[.]; and
 
19      (8)  Accommodations furnished to foreign diplomats and
 
20           consular officials who are holding cards issued or
 
21           authorized by the United States Department of State
 
22           granting them an exemption from state taxes."
 

 
 
 
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                                     H.B. NO.1691       
                                                        
                                                        

 
 1      SECTION 3.  Statutory material to be repealed is bracketed.
 
 2 New statutory material is underscored.
 
 3      SECTION 4.  This Act shall take effect on July 1, 1999.
 
 4 
 
 5                           INTRODUCED BY:  _______________________