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HB1374
HOUSE OF REPRESENTATIVES
H.B. NO.
1374
THIRTY-THIRD LEGISLATURE, 2025
STATE OF HAWAII
A BILL FOR AN ACT
RELATING
TO INTOXICATING LIQUOR
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION 1.
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The legislature finds that the existing tax
rates applied to certain local small craft producer pub licensees discourage
local manufacturing.
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Lowering the
existing tax rates for certain local producers can help support local
manufacturing and prioritize the economic development benefits that these
producers bring to the State.
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Accordingly,
the purpose of this Act is to:
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(1)
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Establish
lower tax rates for certain small craft producer pub licensees; and
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(2)
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Increase
the amounts of certain liquor that may be produced by small craft producer pub
licensees.
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SECTION
2.
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Section 244D-1, Hawaii Revised
Statutes, is amended as follows:
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1.
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By adding a new definition to be appropriately inserted and to read as
follows:
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"
"Low
alcohol by volume spirits beverage" means any alcoholic beverage
containing not more than seven per cent alcohol by volume and includes
distilled spirits mixed with other ingredients, including both nonalcohol and
alcohol components.
"
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2.
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By
amending the definition of "liquor" to read:
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""Liquor" has the same
meaning as set forth in section 281‑1 and includes alcohol, and the
liquor categories:
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beer, [
draft beer,
]
cooler beverage, distilled spirits,
low alcohol by volume spirits beverage,
and wine."
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SECTION
3.
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Section 244D-4, Hawaii Revised
Statutes, is amended by amending subsection (a) to read as follows:
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"
(
a)
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Every person who sells or uses any liquor in
the State not taxable under this chapter, in respect of the transaction by
which the person or the person's vendor acquired the liquor, shall pay a
gallonage tax that is hereby imposed at the following rates for the various
liquor categories defined in section 244D-1:
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On
July 1, 1998, and thereafter, the tax rate shall be:
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(1)
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$5.98 per wine gallon on distilled spirits;
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(2)
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$2.12 per wine gallon on sparkling wine;
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(3)
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$1.38 per wine gallon on still wine;
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(4)
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$0.85 per wine gallon on cooler beverages;
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(5)
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$0.93 per wine gallon on beer other than draft
beer; and
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(6)
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$0.54 per wine gallon on draft beer;
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provided
that, for class 18 small craft producer pub licensees pursuant to section
281-31(r), for the period July 1, 2025, and thereafter, the tax rate
shall be:
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(1)
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$1.98 per wine gallon on distilled
spirits;
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(2)
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$1.38 per wine gallon on sparkling
wine;
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(3)
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$1.28 per wine gallon on low alcohol
by volume spirits beverages;
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(4)
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$0.90 per wine gallon on still wine;
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(5)
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$0.55 per wine gallon on cooler
beverages; and
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(6)
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$0.35 per wine gallon on beer;
and at a
proportionate rate for any other quantity so sold or used."
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SECTION
4
.
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Section 281-31, Hawaii Revised Statutes, is
amended by amending subsection (r) to read as follows:
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"(r)
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Class 18.
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Small craft producer
pub license.
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A small craft producer pub
licensee:
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(1)
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Shall
manufacture not more than:
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(A)
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[
Seventy
]
One hundred
seventy-five
thousand barrels of malt beverages;
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(B)
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Twenty thousand barrels of wine; or
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(C)
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Seven thousand five hundred barrels of
alcohol on the licensee's premises during the license year;
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provided that for purposes of this
paragraph, "barrel" means a container not exceeding thirty-one
gallons or wine gallons of liquor;
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(2)
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May
sell malt beverages, wine, or alcohol manufactured on the licensee's premises
for consumption on the premises;
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(3)
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May
sell malt beverages, wine, or alcohol manufactured by the licensee in
producer-sealed packages to class 3 wholesale dealer licensees pursuant to
conditions imposed by the county by ordinance or rule;
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(4)
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May
sell intoxicating liquor purchased from a class 3 wholesale dealer licensee to
consumers for consumption on the licensee's premises.
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The categories of establishments shall be as
follows:
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(A)
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A
standard bar; or
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(B)
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Premises
in which live entertainment or recorded music is provided.
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Facilities for dancing by the patrons may be
permitted as provided by commission rules;
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(5)
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May,
subject to federal labeling and bottling requirements, sell malt beverages
manufactured on the licensee's premises to consumers in producer-sealed kegs
and recyclable or reusable containers and sell malt beverages manufactured on
the licensee's premises or purchased from a class 1 manufacturer licensee, a
class 3 wholesale dealer licensee, a class 14 brewpub licensee, or a class 18
small craft producer pub licensee to consumers in growlers for off-premises
consumption; provided that for purposes of this paragraph, "growler"
means a recyclable or reusable container that does not exceed one gallon, which
shall be securely sealed;
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(6)
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May,
subject to federal labeling and bottling requirements, sell wine or alcohol
manufactured on the licensee's premises in recyclable containers provided by
the licensee or by the consumer which do not exceed:
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(A)
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One gallon per container for wine; and
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(B)
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One liter for alcohol; and
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are
securely sealed on the licensee's premises to consumers for off-premises
consumption;
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(7)
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Shall
comply with all requirements pertaining to class 4 retail dealer licensees when
engaging in the retail sale of malt beverages, wine, and alcohol;
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(8)
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May,
subject to federal labeling and bottling requirements, sell malt beverages,
wine, and alcohol manufactured on the licensee's premises in producer‑sealed
containers directly to class 2 restaurant licensees, class 3 wholesale dealer
licensees, class 4 retail dealer licensees, class 5 dispenser licensees, class
6 club licensees, class 8 transient vessel licensees, class 9 tour or cruise
vessel licensees, class 10 special licensees, class 11 cabaret licensees, class
12 hotel licensees, class 13 caterer licensees, class 14 brewpub licensees,
class 15 condominium hotel licensees, class 18 small craft producer pub
licensees, and consumers pursuant to conditions imposed by county ordinances or
rules governing class 1 manufacturer licensees and class 3 wholesale dealer
licensees;
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(9)
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May conduct the activities under
paragraphs (1) to (8) at locations other than the licensee's premises; provided
that:
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(A)
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The
manufacturing takes place in
Hawaii;
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(B)
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Each of the
other locations:
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(i)
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Operates within the State under the same trade name for the
premises; and
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(ii)
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Is properly licensed
within the county of its operation
as a class 1 manufacturer licensee, class 2 restaurant licensee, class 4
retail dealer licensee, class 5 dispenser licensee, class 12 hotel licensee,
class 14 brewpub licensee, or class 18 small craft producer pub licensee;
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(C)
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The
county liquor commission of the county in which the licensee satellite is
located shall have jurisdiction of the satellite; and
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(D)
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All
requirements of the license class of the location shall be in effect as
required by the county liquor commission for the satellite licensed premises;
and
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(10)
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May allow minors, who are accompanied
by a parent or legal guardian of legal drinking age, on the licensee's
premises."
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SECTION
5.
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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
6.
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This Act shall take effect on July 1,
2025.
INTRODUCED BY:
_____________________________
Report Title:
Small Craft Producer Tax Rate; Low Alcohol by Volume
Spirits Beverages; Liquor Tax
Description:
Defines
low alcohol by volume spirits beverages.
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Establishes lower tax rates for class 18 small craft producer pub
licensees, including for low alcohol by volume spirits beverages.
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The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.