HB 1215: RELATING TO GENERAL EXCISE TAX EXEMPTION.

A BILL FOR AN ACT

Relating to general excise tax exemption.

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

     SECTION 1.  Section 237-24.75, Hawaii Revised Statutes, is amended to read as follows:

     "§237-24.75  Additional exemptions.  In addition to the amounts exempt under section 237-24, this chapter shall not apply to:

     (1)  Amounts received as a beverage container deposit collected under chapter 342G, part VIII;

     (2)  Amounts received by the operator of the Hawaii convention center for reimbursement of costs or advances made pursuant to a contract with the Hawaii tourism authority under section 201B‑7; [and]

     (3)  Amounts received by a professional employer organization that is registered with the department of labor and industrial relations pursuant to chapter 373L, from a client company equal to amounts that are disbursed by the professional employer organization for employee wages, salaries, payroll taxes, insurance premiums, and benefits, including retirement, vacation, sick leave, health benefits, and similar employment benefits with respect to covered employees at a client company; provided that this exemption shall not apply to amounts received by a professional employer organization after:

          (A)  Notification from the department of labor and industrial relations that the professional employer organization has not fulfilled or maintained the registration requirements under this chapter; or

          (B)  A determination by the department that the professional employer organization has failed to pay any tax withholding for covered employees or any federal or state taxes for which the professional employer organization is responsible.

          As used in this paragraph, "professional employer organization", "client company", and "covered employee" shall have the meanings provided in section 373L-1[.]; and

     (4)  Amounts received by a contractor licensed under chapter 444 for services performed as a general engineering contractor, general building contractor, or specialty contractor in a county having a population of more than one hundred twenty-five thousand but less than one hundred eighty-five thousand."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2025.

Report Title:

General Excise Tax Exemption; Contractors

Description:

Exempts from the general excise tax, amounts received by a contractor for contracting work performed in a county having a population of more than one hundred twenty-five thousand but less than one hundred eighty-five thousand.

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