RELATING TO GENERAL EXCISE TAX EXEMPTIONS.

HB1149

HOUSE OF REPRESENTATIVES

H.B. NO.

1149

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO GENERAL EXCISE TAX EXEMPTIONS.

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

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

(2)
�
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)
�
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)
�
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)
�
Amounts
received as salaries or wages for services rendered by an employee to an
employer;

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

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(8)
�
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)
�
Taxes
on liquor imposed by chapter 244D on dealers holding permits under that
chapter;

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(10)
�
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)
�
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)
�
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)
�
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)
�
Amounts
received by a producer of sugarcane from the manufacturer to whom the producer
sells the sugarcane, where:

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

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(C)
�
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)
�
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)
]

(14)
�
Money paid by the State or eleemosynary
child-placing organizations to foster parents for their care of children in
foster homes;
and

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[
(16)
]

(15)
�
Amounts received by a cooperative housing
corporation from its shareholders in reimbursement of funds paid by the
corporation for lease rental, real property taxes, and other expenses of
operating and maintaining the cooperative land and improvements; provided that
[
such a
]
the
cooperative corporation is a corporation:

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

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(B)
�
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)
�
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
)
�
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
]."

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SECTION 2.
�

Section 421H-4, Hawaii Revised Statutes, is amended by amending
subsection (c) to read as follows:

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"(c)
�

The membership shares and cooperative fees are interests in real
property for purposes of:

����
(1)
�
Cooperative
housing corporations under section 216 of the federal Internal Revenue Code of
1954, as amended; and

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(2)
�
Exemption
from state general excise tax under section [
237-24(16).
]
237-24(15).
"

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SECTION 3.
�

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

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SECTION 4.
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This Act, upon its approval, shall take effect on January 1, 2026.

INTRODUCED BY:

_____________________________

BY REQUEST

Report Title:

General Excise Tax Exemptions; Sugar Cane Growers;
TRICARE; Patient-Centered Community Care Programs

Description:

Repeals the general excise tax exemption for amounts
received by independent sugar cane farmers.
�

Repeals the general excise tax exemption for 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.
�
Effective
1/1/2026.

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