General Excise Tax; Exclusions
Excludes from excise tax proceeds from: the manufacture, packaging, and sale of food; residential rent; and the provision of services and products for health care.
HOUSE OF REPRESENTATIVES
TWENTY-FIRST LEGISLATURE, 2002
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. Perhaps one of the greatest obstacles facing Hawaii's drive toward excellence in the new millennium is our burdensome and regressive general excise tax system. The legislature finds that many residents of Hawaii face great difficulty affording the high cost of food, housing, and health care services. Part of this high cost is attributable to the general excise tax, which is passed on to the consumer or intermediary. Although the legislature passed a law reducing the effect of the pyramiding of the general excise tax, this approach does not deal with the true heart of the matter.
We all need food to survive. The same goes for shelter and medical services. These are basic human needs. The disenfranchised among us -- the chronically ill, the elderly, the disabled, pregnant women, and our children -- need these even more. Yet many live on fixed incomes, making the tax bite and cost even more insidious. The cost of basic human needs should not be a roadblock in our drive towards excellence. As a community, we cannot afford the impact of our regressive general excise tax system.
The purpose of this Act is to remove basic needs from the purview of the general excise tax.
SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding three new sections to be appropriately designated and to read as follows:
"§237- Exemption for food. (a) There shall be exempted from, and excluded from the measure of, the taxes imposed by this chapter all of the gross proceeds or income arising from the manufacture, production, packaging, and sale of food items within the State.
(b) As used in this section, "food items" means any food or food product for home consumption except alcoholic beverages, tobacco, and hot food or hot food products ready for immediate consumption, and:
(1) In the case of those persons who are sixty years of age or over or who receive supplemental security income benefits under title XVI of the Social Security Act (42 U.S.C. section 1381 et seq.), and their spouses, includes meals prepared by and served in senior citizens' centers, apartment buildings occupied primarily by senior citizens, private nonprofit establishments (eating or otherwise) that feed senior citizens, private establishments that contract with the appropriate state or county agency to offer meals for senior citizens at concessional prices, and meals prepared for and served to residents of federally subsidized housing for the elderly;
(2) In the case of persons sixty years of age or over and persons who are physically or mentally handicapped or otherwise so disabled that they are unable to adequately prepare all of their meals, includes meals prepared for and delivered to them and their spouses at their home by a public or private nonprofit organization or by a private establishment that contracts with the appropriate state or county agency to perform meal services at concessional prices;
(3) In the case of narcotics addicts or alcoholics served by drug addiction or alcoholic treatment and rehabilitation programs, includes meals prepared and served under rehabilitation programs;
(4) In the case of disabled or blind recipients of benefits under title II or title XVI of the Social Security Act (42 U.S.C. sections 401 et seq., 1381 et seq.) who are residents in a public or private nonprofit group living arrangement that serves not more than sixteen residents and is certified by the appropriate state agency or agencies under regulations issued under section 1616(e) of the Social Security Act (42 U.S.C. section 1382(e) (1)), includes meals prepared and served under the arrangement; and
(5) In the case of women and children temporarily residing in public or private nonprofit shelters for battered women and children, includes meals prepared and served by the residential shelters.
The phrase "food items" may be further defined by the department of taxation through the adoption of rules pursuant to chapter 91, or informational releases; provided that the department shall consult with the federal Food and Nutrition Service of the United States Department of Agriculture in further defining the phrase "food items" for food stamp purposes.
§237- Exemption for health care services and equipment. (a) There shall be exempted from, and excluded from the measure of, the taxes imposed by this chapter all of the gross proceeds or income arising from the provision of health care services or equipment.
(b) For purposes of this section, "health care services" means services involved in the diagnosis, cure, mitigation, treatment, or prevention of disease or the promotion of wellness of body when provided by one of the following types of facilities or persons:
(1) Nonprofit or for-profit hospitals;
(2) Surgical outpatient facilities;
(3) Dialysis facilities;
(5) Skilled nursing facilities;
(6) Intermediate care facilities;
(7) Adult residential care homes;
(8) Adult foster homes;
(9) Assisted living facilities;
(10) Adult day care facilities;
(13) Surface and air ambulances; and
(14) Persons holding a valid license under chapters 442, 447, 448, 451A, 452, 453, 455, 457, 457A, 457G, 458, 459, 460, 461, 461J, 463E, 465, 466J, and 468E.
(c) As used in this section, "medical equipment" means any device, instrument, appliance, apparatus or contrivance, electronic, mechanical, or otherwise that is intended for the use in the diagnosis, cure, mitigation, treatment, or prevention of disease or the promotion of wellness of body when provided by one of the entities or persons specified in subsection (b).
§237- Exemption for residential rent. There shall be exempted from, and excluded from the measure of, the taxes imposed by this chapter all of the gross proceeds or income arising from the amounts of moneys received by landlords, lessors, and landowners as residential rent."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2002.