Report Title:

Procurement; Small Purchases; GET and Use Tax; Not Considered as Part of Bid

Description:

Specifies that for government purchases under $25,000, the inclusion of general excise and applicable use tax in an offer or bid for a government contract shall not be considered by the purchasing agency as part of the cost aspect of the bid or offer, if the bidder or offeror is a state resident vendor or contractor. Defines "state resident vendor or contractor". Maintains requirement that general excise tax and applicable use tax be paid. Clarifies inclusion of GET and use tax requirement for other purchases. (SD1)

HOUSE OF REPRESENTATIVES

H.B. NO.

1253

TWENTY-SECOND LEGISLATURE, 2003

H.D. 1

STATE OF HAWAII

S.D. 1


 

A BILL FOR AN ACT

 

RELATING TO PROCUREMENT.

 

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

SECTION 1. Chapter 103D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"103D- Evaluation of bids and offers for contracts valued at less than $25,000; state resident contractors; inclusion of applicable taxes; not considered. (a) In addition to the procedures established pursuant to section 103D-305 and notwithstanding section 103D-1008, in evaluating bids or offers on contracts valued at less than $25,000, to determine the cost aspect of a bid or offer, the purchasing agency shall not consider as part of the bid or offer, the inclusion of general excise tax or any applicable use tax by a bidder or offeror that is a state resident vendor or contractor. This section shall not be construed to absolve a winning offeror or bidder of any applicable tax liability.

(b) For purposes of this section, "state resident vendor or contractor" means a contractor or vendor incorporated or organized under the laws of the State that complies with all laws governing entities doing business in the State, including chapters 237, 383, 386, 392, and 393. Bidders and offerors shall produce documents to the procuring officer to demonstrate compliance with this subsection. Any bidder or offeror making a false affirmation or certification under this subsection shall be suspended from further offerings or awards pursuant to section 103D-702.

(c) The policy board shall adopt rules under chapter 91 and may create forms to effectuate the purposes of this section."

SECTION 2. Section 103D-1008, Hawaii Revised Statutes, is amended to read as follows:

"[[]103D-1008[]] Taxpayer preference. For evaluation purposes, the bidder's [tax-exempt] pre-tax price shall be increased by the applicable retail rate of general excise tax and the applicable use tax[.] if the tax has not already been included in the bid price; provided that this increase shall not apply to bids submitted pursuant to section 103D- . For competitive sealed bids, the lowest responsive, responsible bidder, taking into consideration the above increase, shall be awarded the contract, but the contract amount of any contract awarded shall be the amount of the price offered and shall not include the amount of the increase. For the purposes of this section, "pre-tax price" means the price of a good, service, or construction project prior to the inclusion of any state general excise tax or applicable use tax."

SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.