RELATING TO TAXATION.

HB2521

HOUSE OF REPRESENTATIVES

H.B. NO.

2521

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to taxation
.

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

����
SECTION 1.
�
Chapter 237, Hawaii Revised Statutes, is
amended by adding a new section to be appropriately designated and to read as
follows:

����
"
�237-
�
Exemption
of groceries, health care, and utility costs.
�
(a)
�
There shall be exempted from, and excluded
from the measure of, the taxes imposed by this chapter all of the gross
proceeds or income arising from the sale of groceries, health care services,
and utility services
.

����
(b)
�

For the purposes of this section:

����
"Cable" has the same
meaning as "cable service" as defined in section 440G-3.

����
"Food" or "food ingredient"
means 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.

����
"Groceries" means any food or food ingredients
sold for home consumption.
�

"Groceries" may be further defined by the department of
taxation by rule through the enumeration of items in rules or a tax
informational release.

����
"Health care services" means
services provided by a person licensed and conducted under chapter 436E, 442,
447, 448, 448B, 451A, 451J, 451K, 452, 453, 453D, 455, 457, 457A, 457G, 458,
459, 461, 461J, 463E, 465, 465D, 466D, 466J, or 468E.

����
"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, chopsticks, 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, meat, poultry, or foods containing these raw animal foods requiring
cooking by the consumer to prevent food borne illness, 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.

����
"Telecommunications"
has the same meaning as "telecommunications service" as defined in
section 269-1.

����
"Utility service" means service for
electricity, water, sewer, natural gas, cable, or telecommunications.
"

����
SECTION 2.
�
New statutory material is underscored.

����
SECTION 3.
�
This Act shall take effect on July 1, 2027.

INTRODUCED BY:

_____________________________

Report Title:

DOTAX;
General Excise Tax; Exemptions; Groceries; Health Care; Utilities

Description:

Exempts
from the general excise tax the sale of groceries, health care services, and
utility services.
�
Defines terms.

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