Report Title:

GENERAL EXCISE TAX EXCLUSION FOR FOOD

 

Description:

This Act seeks to exclude proceeds from the manufacture, packaging, and sale of food from general excise tax liability.

 

HOUSE OF REPRESENTATIVES

H.B. NO.

257

TWENTY-FIRST LEGISLATURE, 2001

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO THE EXCLUSION OF proceeds FROM THE manufacture, packaging, and sale of food from GENERAL EXCISE TAX liability.

 

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

SECTION 1. One of the greatest obstacles facing Hawaii's drive toward excellence in the new millenium is our burdensome and regressive tax system. The Legislature finds that many residents of Hawaii face great difficulty affording the high cost of food. Part of the reason for the high cost of food in Hawaii 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; it is a basic human need. The disenfranchised the elderly, the disabled, and our children need food even more. Yet most 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 bill is to remove food from the purview of the general excise tax.

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

"237- (a) Exemption for food. 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.

(1) As used in this section, "food items" means any food or food product for home consumption except alcoholic beverages, tobacco, and food products prepared at the place of sale or at another location and sold primarily for immediate or nearly immediate consumption, and:

(A) 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. 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 agency of the State to offer meals for senior citizens at concessional prices, and meals prepared for and served to residents of federally subsidized housing for the elderly;

(B) 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 agency to perform meal services at concessional prices;

(C) 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;

(D) 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. 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. 1382(e)(1), includes meals prepared and served under the arrangement; and

(E) 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 enumeration of items in rules 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.

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on January 1, 2002.

INTRODUCED BY:

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