RELATING TO THE GENERAL EXCISE TAX.

HB1125

HOUSE OF REPRESENTATIVES

H.B. NO.

1125

THIRTY-THIRD LEGISLATURE, 2025

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:

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SECTION 1.
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Section 237-24, Hawaii Revised Statutes, is
amended to read as follows:

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"
�237-24
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Amounts not taxable.
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This chapter shall not apply to the following
amounts:

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(1)
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Amounts
received under life insurance policies and contracts paid by reason of the death
of the insured;

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(2)
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Amounts received (other than amounts
paid by reason of death of the insured) under life insurance, endowment, or
annuity contracts, either during the term or at maturity or upon surrender of
the contract;

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(3)
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Amounts
received under any accident insurance or health insurance policy or contract or
under workers' compensation acts or employers' liability acts, as compensation
for personal injuries, death, or sickness, including also the amount of any
damages or other compensation received, whether as a result of action or by
private agreement between the parties on account of the personal injuries,
death, or sickness;

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(4)
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The
value of all property of every kind and sort acquired by gift, bequest, or
devise, and the value of all property acquired by descent or inheritance;

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(5)
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Amounts
received by any person as compensatory damages for any tort injury to the
person, or to the person's character reputation, or received as compensatory
damages for any tort injury to or destruction of property, whether as the
result of action or by private agreement between the parties (provided that
amounts received as punitive damages for tort injury or breach of contract
injury shall be included in gross income);

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(6)
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Amounts
received as salaries or wages for services rendered by an employee to an
employer;

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(7)
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Amounts
received as alimony and other similar payments and settlements;

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(8)
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Amounts
collected by distributors as fuel taxes on "liquid fuel" imposed by
chapter 243, and the amounts collected by such distributors as a fuel tax
imposed by any Act of the Congress of the United States;

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(9)
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Taxes on liquor imposed by chapter 244D
on dealers holding permits under that chapter;

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(10)
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The amounts of taxes on cigarettes and
tobacco products imposed by chapter 245 on wholesalers or dealers holding
licenses under that chapter and selling the products at wholesale;

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(11)
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Federal excise taxes imposed on
articles sold at retail and collected from the purchasers thereof and paid to
the federal government by the retailer;

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(12)
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The amounts of federal taxes under
chapter 37 of the Internal Revenue Code, or similar federal taxes, imposed on
sugar manufactured in the State, paid by the manufacturer to the federal
government;

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(13)
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An amount up to, but not in excess of,
$2,000 a year of gross income received by any blind, deaf, or totally disabled
person engaging, or continuing, in any business, trade, activity, occupation,
or calling within the State; a corporation all of whose outstanding shares are
owned by an individual or individuals who are blind, deaf, or totally disabled;
a general, limited, or limited liability partnership, all of whose partners are
blind, deaf, or totally disabled; or a limited liability company, all of whose
members are blind, deaf, or totally disabled;

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(14)
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Amounts received by a producer of
sugarcane from the manufactur
er to whom the producer sells the sugarcane,
where:

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(A)
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The producer is an independent cane farmer, so
classed by the Secretary of Agriculture under the Sugar Act of 1948 (61 Stat. 922,
chapter 519) as the Act may be amended or supplemented;

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(B)
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The value or gross proceeds of sale of the sugar,
and other products manufactured from the sugarcane, is included in the measure of
the tax levied on the manufacturer under section 237-13(1) or (2);

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(C)
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The producer's gross proceeds of sales are dependent
upon the actual value of the products manufactured therefrom or the average value
of all similar products manufactured by the manufacturer; and

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(D)
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The producer's gross proceeds of sales are reduced
by reason of the tax on the value or sale of the manufactured products;

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(15)
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Money paid by the State or eleemosynary child-placing
organizations to foster parents for their care of children in foster homes;

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(16)
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Amounts received by a cooperative housing corporation
from its shareholders in reimbursement of funds
paid

by such corporation for lease rental, real property taxes, and other expenses of
operating and maintaining the cooperative land and improvements; provided that such
a cooperative corporation is a corporation:

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(A)
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Having
one and only one class of stock
outstanding
;

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(B)
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Each
of the stockholders of which is entitled solely by reason of the stockholder's ownership
of stock in the corporation, to occupy for dwelling purposes a house, or an apartment
in a building owned or leased by the corporation; and

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(C)
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No stockholder of which is entitled (either conditionally
or unconditionally) to receive any distribution not out of earnings and profits
of the corporation except in a complete or partial liquidation of the corporation;
[
and
]

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(17)
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Amounts received by a contractor of the Patient-
Centered

Community Care program that is established by the United States Department of Veterans
Affairs pursuant to title 38 United States Code section 8153, as amended, for the
actual costs or advancements to third party health care providers pursuant to a
contract with the United States[
.
]
; and

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(18)
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Amounts received by an adult residential
care home licensed under section 321-15.6 or expanded adult residential care
home licensed under 321-15.62 for providing residential care services pursuant
to a contract with the department of health.
"

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SECTION 2.
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Statutory material to be repealed is bracketed and stricken.
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New statutory material is underscored.

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SECTION 3.
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This Act, upon its approval, shall take effect on January 1, 2026.

INTRODUCED BY:

_____________________________

BY REQUEST

Report Title:

DOH; General Excise Tax; Exemption; Adult Residential Care
Homes

Description:

Authorizes general excise tax exemptions for residential
care services provided by certain licensed health care facilities pursuant to a
contract with the Adult Mental Health Division of the Department of
Health.
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Effective 1/1/26.

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not legislation or evidence of legislative intent.