RELATING TO THE GENERAL EXCISE TAX.

Taxes

Active

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

Sponsor: ILAGAN
Last action: 2025-12-08
Official status: Carried over to 2026 Regular Session.
Effective date: Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Exempting Restaurant Revitalization Fund Grants from State Tax

This bill makes grants received by eligible businesses through the federal Restaurant Revitalization Fund (RRF) exempt from Hawaii's general excise tax and requires refunds for any taxes already paid on these grants.

What This Bill Does

Makes RRF grants exempt from Hawaii's general excise tax.
Requires the state to refund any general excise tax that eligible businesses have already paid on RRF grants.
Applies this exemption and refund policy to taxable years starting after March 11, 2021.

Who It Names or Affects

Restaurants and food service businesses that received RRF grants under the American Rescue Plan Act of 2021.

Terms To Know

Restaurant Revitalization Fund (RRF): A federal program providing grants to restaurants and other food service establishments affected by the COVID-19 pandemic.
General Excise Tax: A tax imposed on businesses in Hawaii for selling goods or services, as well as on consumers for purchasing them.

Limits and Unknowns

The bill does not specify a deadline by which refunds must be issued to eligible businesses.
It is unclear how many restaurants will qualify and benefit from this exemption and refund policy.

Bill History

2025-12-08 D
Carried over to 2026 Regular Session.
2025-01-23 H
Referred to ECD, FIN, referral sheet 3
2025-01-23 H
Introduced and Pass First Reading.
2025-01-21 H
Pending introduction.

Official Summary Text

RELATING TO THE GENERAL EXCISE TAX.
General Excise Tax; Exemption; COVID-19; Relief Funds; American Rescue Plan Act of 2021; Restaurant Revitalization Fund; Refund
Establishes that any grants received from the federal Restaurant Revitalization Fund (RRF) by an eligible business pursuant to the American Rescue Plan Act of 2021 shall not be subject to state general excise tax. Requires any state general excise tax paid by eligible businesses for RRF grants to be refunded to the tax payer. Applicable to taxable years beginning after 3/11/2021.

Current Bill Text

Read the full stored bill text

HB937

HOUSE OF REPRESENTATIVES

H.B. NO.

937

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:

����
SECTION 1.
�
The
legislature finds that the federal government established various relief
programs to provide
critical assistance to millions of
individuals,
families, and
businesse
s, during the COVID-19 pandemic and the
nation's recovery therefrom, pursuant to the Coronavirus Aid, Relief, and
Economic Security Act (CARES Act) effective March 27, 2020, and the American
Rescue Plan Act of 2021 (ARPA), effective March 11, 2021.

����
The
legislature further finds that t
he CARES Act
created
the Paycheck Protection Program (PPP), which provided a forgivable loan to
small businesses, and the Economic Injury Disaster Loan Emergency Advances
(EIDL) Grant, which provided loan advances that do not need to be repaid, to
small businesses.
�
Likewise, ARPA created
the Restaurant Revitalization Fund (RRF) to provide grants to food and beverage
businesses that experienced revenue loss related to the COVID-19 pandemic.

����
The
legislature also finds that on May 4, 2020, the department of taxation issued
Tax Information Release No. 2020‑02 (Revised), providing guidance on
the State's tax treatment of various COVID-19 relief programs and payments
under the CARES Act, which specified that in light of the severity of the
economic impact of the COVID-19 pandemic, state general excise tax will not be
imposed on the loan amounts forgiven under PPP and EIDL Grants.

����
The
legislature additionally finds that in 2024, the department of taxation
announced that the general excise tax exemption applicable to the forgiven PPP
loans and EIDL Grants under the CARES Act does not apply to the RRF grants
under ARPA, despite the purpose of RRF grants aligning with the rationale
behind the PPP and EIDL Grants.

����
Accordingly,
the purpose of this Act is to exempt Restaurant Revitalization Fund grants received
by eligible businesses pursuant to the American Rescue Plan Act of 2021 from the
state general excise tax.

����
SECTION
2.
�
(a)
�

Any grants received from the federal Restaurant Revitalization Fund by
an eligible business pursuant to the American Rescue Plan Act of 2021 shall not
be subject to general excise taxation under chapter 237, Hawaii Revised
Statues.

����
(b)
�
Any state
general excise tax paid by eligible businesses for grants received from the
federal Restaurant Revitalization Fund shall be refunded to the tax payer, no
later than .

����
SECTION
3
.
�
This Act
,
upon its approval
, shall
apply retroactive to taxable years beginning after March 11, 2021.

INTRODUCED BY:

_____________________________

Report Title:

General
Excise Tax; Exemption
;

COVID-19; Relief Funds;

American
Rescue Plan Act of 2021; Restaurant Revitalization Fund; Refund

Description:

Establishes that a
ny grants received from the federal Restaurant Revitalization
Fund
(RRF)
by an
eligible business pursuant to the American Rescue Plan Act of 2021 shall not be
subject to
state
general
excise tax
.
�
Requires a
ny state general excise tax paid by
eligible businesses for RRF
grants to
be refunded to the tax payer.
�

Applicable to taxable years beginning after 3/11/2021.

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