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SB2399
THE SENATE
S.B. NO.
2399
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
relating
to a general excise tax exemption for aircraft maintenance
.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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SECTION 1.
�
The legislature finds that many states,
including Arizona, California, Colorado, Connecticut, Florida, Georgia, Iowa,
Kansas, Massachusetts, Minnesota, New York, North Carolina, Ohio, Pennsylvania,
Texas, and Wisconsin, explicitly exempt aircraft parts from their sales tax if
sold to a federally licensed air carrier.
�
In Hawaii, there is an exemption in the general excise tax law for
aircraft servicing and maintenance.
�
However, the Hawaii Intermediate Court of Appeals has recently decided
that the exemption language does not exempt from the general excise tax the
sale of parts to an aircraft carrier, even though the complementary use tax law
explicitly exempts from the use tax imports of these parts from an out-of-state
seller.
�
To correct this imbalance,
recognize the critical importance of the airline industry to the State, and
ensure competitiveness with other states, including those listed above, in
attracting and maintaining aircraft maintenance jobs and facilities, the
purpose of this Act is to provide a general excise tax exemption for the sale
of material, parts, or tools that are used for aircraft service and maintenance
or for the construction of an aircraft service and maintenance facility.
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SECTION
2
.
�
Section 237-24.9, Hawaii Revised Statutes, is
amended by amending its title and subsection (a) to read as follows:
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"
�237-24.9
�
Aircraft service
,
[
and
] maintenance facility[
.
]
,
and sale of related materials.
�
(a)
�
This chapter shall not apply
to amounts received from the servicing and maintenance of aircraft [
or
]
,
from the construction of an aircraft service and maintenance facility in the
State[
.
]
, or from the sale of material, parts, or tools to a licensed
aircraft carrier if they are purchased for aircraft service and maintenance or
for the construction of an aircraft service and maintenance facility.
"
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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Statutory material to be repealed is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.
�
This Act shall take effect on July 1, 2026.
INTRODUCED BY:
_____________________________
Report Title:
Taxation;
General Excise Tax; Aircraft Service and Maintenance
Description:
Provides
a general excise tax exemption for the sale of material, parts, or tools used
for aircraft service and maintenance or for the construction of an aircraft
service and maintenance facility.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.