H.B. NO.



















SECTION 1.  The purpose of this Act is to help reduce the impact of the general excise tax and thereby reduce the cost-of-living for Hawaii residents by exempting amounts received for food.

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

     §237-  Amounts not taxable for food.  (a)  The excise tax assessed under this chapter shall not apply to amounts received for food or food ingredients.

     (b)  The excise tax assessed under this chapter shall apply to food or food ingredients that are furnished, prepared, or served as meals, except:

(1)    In the case of persons sixty years of age or over, or who receive supplemental security income benefits, or disability or blindness payments under title I, II, X, XIV, or XVI of the Social Security Act (42 U.S.C. 301 et seq., 401 et seq., 1201 et seq., 1351 et seq., 1381 et seq.) and their spouses, meals prepared by and served in senior citizens' centers, apartment buildings occupied primarily by such persons, public or private nonprofit establishments, eating or otherwise, that feed such persons, private establishments that contract with the appropriate agency of the State to offer meals for such persons 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, 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 such services at concessional prices;

(3)    In the case of disabled or blind recipients of benefits under title I, II, X, XIV, or XVI of the Social Security Act (42 U.S.C. 301 et seq., 401 et seq., 1201 et seq., 1351 et seq., 1381 et seq.), who are residents in a public or private nonprofit group living arrangement that serves no more than sixteen residents and is certified by the appropriate state agency or agencies, meals prepared and served under such arrangement;

(4)    In the case of women and children temporarily residing in public or private nonprofit shelters for battered women and children, meals prepared and served by such shelters; and

(5)    In the case of households that do not reside in permanent dwellings and households that have no fixed mailing addresses, meals prepared for and served by a public or private nonprofit establishment approved by an appropriate state or local agency that feeds such individuals and by private establishments that contract with the appropriate agency of the State to offer meals for such individuals at concessional prices.

     (c)  As used in this section:

     "Alcoholic beverages" means beverages that are suitable for human consumption and contain one-half of one per cent or more of alcohol by volume.

     "Dietary supplement" means any product, other than tobacco, intended to supplement the diet that:

(1)    Contains one or more of the following dietary ingredients:

(A)    A vitamin;

(B)    A mineral;

(C)    An herb or other botanical element;

(D)    An amino acid; or

(E)    A dietary substance for use by humans to supplement a person's diet by increasing the total dietary intake; or a concentrate, metabolite, constituent, extract, or combination of any ingredient described in this definition;

(2)    Is intended for ingestion in tablet, capsule, powder, softgel, gelcap, or liquid form, or if not intended for ingestion in such form, is not represented as conventional food and is not represented for use as a sole item of a meal or of a diet; and

(3)    Is required to be labeled as a dietary supplement, identifiable by the "supplement facts" box found on the label as required pursuant to title 21 Code of Federal Regulations section 101.36, as amended or renumbered.

     "Food" or "food ingredients" mean substances, whether in liquid, concentrated, solid, frozen, dried, or dehydrated form, that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value.  Food or food ingredients does not include alcoholic beverages, tobacco, prepared food, soft drinks, dietary supplements, or food or food ingredients sold from a vending machine, whether cold or hot; provided that food or food ingredients sold from a vending machine that is subsequently heated shall be subject to this chapter.

     "Prepared food" means:

(1)    Food sold in a heated state or heated by the seller;

(2)    Food sold with eating utensils provided by the seller, including plates, knives, forks, spoons, glasses, cups, napkins, or straws.  A plate does not include a container or packaging used to transport the food; or

(3)    Two or more food ingredients mixed or combined by the seller for sale as a single item, except:

(A)    Food that is only cut, repackaged, or pasteurized by the seller; or

(B)    Raw eggs, fish, meat, poultry, or foods containing these raw animal foods requiring cooking by the consumer as recommended by the federal Food and Drug Administration in chapter 3, part 401.11 of the Food Code, published by the Food and Drug Administration, as amended or renumbered, to prevent foodborne illness.

Prepared food does not include the following food or food ingredients:

(1)    Food sold in an unheated state by weight or volume as a single item; or

(2)    Bakery items, such as bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, Danish, cakes, tortes, pies, tarts, muffins, bars, cookies, or tortillas.

     "Soft drinks" means nonalcoholic beverages that contain natural or artificial sweeteners.  Soft drinks do not include beverages that contain:

(1)    Milk or milk products;

(2)    Soy, rice, or similar milk substitutes; or

(3)    Greater than fifty per cent vegetable or fruit juice by volume.

     "Tobacco" means cigarettes, cigars, chewing or pipe tobacco, or any other item that contains tobacco."

     SECTION 3.  New statutory material is underscored.

     SECTION 4.  This Act shall take effect upon its approval and shall apply to taxable years beginning after December 31, 2017.









Report Title:

General Excise Tax; Food Exemption




Provides an exemption for food from the general excise tax.




The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.