RELATING TO GENERAL EXCISE TAX EXEMPTIONS.

Education Taxes

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: NAKAMURA (Introduced by request of another party)
Last action: 2025-12-08
Official status: Carried over to 2026 Regular Session.
Effective date: Not listed

Plain English Breakdown

The bill's effective date has been corrected to January 1, 2026.

Tax Exemptions for Nonprofit Schools

This bill establishes a general excise tax exemption for sales that benefit nonprofit schools in Hawaii.

What This Bill Does

Establishes an exemption from the general excise tax on gross proceeds or income received from sales of goods and services that help nonprofit schools.
Defines 'nonprofit school' as organizations recognized by the IRS under section 501(c)(3) and registered with the state.
Specifies that a sale benefits a nonprofit school if all profits, after deducting actual costs, are donated to the school for its educational purposes.

Who It Names or Affects

Nonprofit schools
School-sponsored student activity groups

Terms To Know

nonprofit school: An organization recognized by the IRS as a charitable group that is exempt from federal taxes and registered with the state.
sale that benefits a nonprofit school: A sale where all proceeds, after costs are deducted, go to support the educational activities of a nonprofit school.

Limits and Unknowns

The bill does not specify how sales by for-profit schools will be taxed.
It is unclear if there are any limits on what types of goods or services qualify for this exemption.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

HD1

Hawaii published version HD1

Plain English: This amendment creates a new tax exemption for nonprofit schools, allowing them to sell goods or services without paying the general excise tax if all proceeds go back to support educational activities.

Adds a new section in Chapter 237 of Hawaii Revised Statutes that exempts nonprofit schools and their sponsored student activity groups from the general excise tax on sales that benefit the school.

The amendment specifies an effective date of January 1, 3000, which seems unrealistic and likely indicates a placeholder or error in the text.

HD2

Hawaii published version HD2

Plain English: This amendment creates a new tax exemption for nonprofit schools, allowing them to sell goods or services without paying general excise tax if the proceeds go directly back to the school.

Adds a new section in Chapter 237 of Hawaii Revised Statutes that exempts nonprofit schools and their sponsored student activity groups from general excise taxes on sales that benefit the school.

The amendment specifies an effective date of January 1, 3000, which seems unrealistic and likely indicates a placeholder or error in the text.

Bill History

2025-12-08 D
Carried over to 2026 Regular Session.
2025-03-12 S
The committee on EDU deferred the measure.
2025-03-07 S
The committee(s) on EDU has scheduled a public hearing on 03-12-25 3:00PM; Conference Room 229 & Videoconference.
2025-03-06 S
Referred to EDU, WAM.
2025-03-06 S
Passed First Reading.
2025-03-06 S
Received from House (Hse. Com. No. 374).
2025-03-04 H
Passed Third Reading as amended in HD 2 with Representative(s) Iwamoto voting aye with reservations; none voting no (0) and Representative(s) Pierick, Ward excused (2). Transmitted to Senate.
2025-02-28 H
Forty-eight (48) hours notice Tuesday, 03-04-25.
2025-02-28 H
Reported from FIN (Stand. Com. Rep. No. 1027) as amended in HD 2, recommending passage on Third Reading.
2025-02-20 H
The committee on FIN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 14 Ayes: Representative(s) Yamashita, Takenouchi, Grandinetti, Holt, Hussey, Keohokapu-Lee Loy, Kitagawa, Kusch, Lamosao, Lee, M., Miyake, Morikawa, Templo, Reyes Oda; Ayes with reservations: none; Noes: none; and 2 Excused: Representative(s) Alcos, Ward.
2025-02-18 H
Bill scheduled to be heard by FIN on Thursday, 02-20-25 10:00AM in House conference room 308 VIA VIDEOCONFERENCE.
2025-02-14 H
Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Matayoshi, Poepoe, Ward excused (4).
2025-02-14 H
Reported from EDN (Stand. Com. Rep. No. 755) as amended in HD 1, recommending passage on Second Reading and referral to FIN.
2025-02-13 H
The committee on EDN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 10 Ayes: Representative(s) Woodson, La Chica, Amato, Evslin, Garrett, Kapela, Kila, Olds, Sayama, Souza; Ayes with reservations: none; Noes: none; and 1 Excused: Representative(s) Muraoka.
2025-02-11 H
Bill scheduled to be heard by EDN on Thursday, 02-13-25 2:00PM in House conference room 309 VIA VIDEOCONFERENCE.
2025-01-27 H
Referred to EDN, FIN, referral sheet 4
2025-01-23 H
Introduced and Pass First Reading.

Official Summary Text

RELATING TO GENERAL EXCISE TAX EXEMPTIONS.
General Excise Tax; Exemption; Nonprofit Schools
Establishes a general excise tax exemption on the gross proceeds or gross income received from sales of commodities or services that benefit nonprofit schools. Effective 1/1/3000. (HD2)

Current Bill Text

Read the full stored bill text

HB1437

HOUSE OF REPRESENTATIVES

H.B. NO.

1437

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:

����
SECTION 1.
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The purpose of this Act is to establish a
general excise tax exemption on the gross proceeds or gross income received from

sales of commodities or services
that benefit
nonprofit schools.

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

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"
�237-
�
Nonprofit
schools; additional amounts not taxable.
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(a) In addition to the amounts
exempt under section 237-24, this chapter shall not apply to the gross proceeds
or gross income arising from a sale that benefits a nonprofit school, if the
sale is made by either:

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(1)
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A nonprofit school; or

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(2)
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A school-sponsored student activity group.

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(b)
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As
used in this section:

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"Nonprofit school" means an
organization that is:

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(1)
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Recognized by
the Internal Revenue Service as a charitable organization that is organized and
operated exclusively for educational purposes and is exempt from federal
taxation under section 501(c)(3) of the Internal Revenue Code of 1986, as
amended; and

����
(2)
�
Registered and
in good standing with the State and is exempt from the application of this
chapter pursuant to section 237-23(a)(4).

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"Sale that benefits a
nonprofit school" means a sale of a commodity or service from which all
proceeds of the sale, less only the actual cost of the commodity or service to the
nonprofit school or school-sponsored student activity group, are donated to the
nonprofit school and are used exclusively to further the nonprofit school's tax
exempt purpose.

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"School-sponsored student
activity group" means a group connected to and under the control of a
nonprofit school.
�
"School-sponsored
student activity group" includes student government; athletic, math, and
debate teams; band, orchestra, choir, drama, and other performing groups;
foreign language clubs; honor societies; pep squads; and other student activity
groups that come under the control of the nonprofit school.
"

����
SECTION 3.
�
New statutory material is underscored.

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SECTION 4.
�
This Act shall take effect on January 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

General
Excise Tax Exemption; Nonprofit Schools

Description:

Establishes
a general excise tax exemption on the gross proceeds or gross income received from
sales of commodities or services that benefit nonprofit schools.
�
Effective 1/1/2026.

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