HB2391

HOUSE OF REPRESENTATIVES	H.B. NO.	2391
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. The legislature finds that Hawaii taxpayers are some of the most overburdened taxpayers in the nation. This burden is most exacerbated when consumers are taxed on critical items needed for school. Nationally, consumer groups estimated that families with students between grades K-12 are estimated to spend an average of over $800 on back-to-school necessities. This is a daunting price tag for many local families, as the school supply list begins to grow and the cost of living only ever seems to increase.

Several states, including Alabama, Connecticut, Florida, Georgia, Illinois, Iowa, Louisiana, Maryland, Missouri, Mississippi, New Mexico, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Vermont, and Virginia, have temporary state sales tax holidays. A general excise tax holiday would allow Hawaii residents to retain more of their money to spend on other necessities.

The legislature further recognizes that the State levies a general excise tax on businesses, rather than a state sales tax on consumers. The purpose of this Act is to authorize a state general excise tax holiday for school supplies sold in the State prior to the start of the school year on the condition that businesses pass the savings on to consumers.

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

"§237- School supply tax holiday. (a) Notwithstanding any law to the contrary, taxes under this chapter shall not be due on the sale of clothing or bags with a retail sales price of $100 or less per item or the sale of school supplies if the sale takes place between 12:01 a.m. on the last Friday prior to students' first day of public school, as designated on the department of education official school calendar, and ending at 12 midnight of the Sunday immediately following that Friday; provided that all savings generated by this section shall be passed on by the seller to the purchaser without any increase in price. This exemption shall apply to the sale of school supplies only and not to sales of items that will be resold in any manner.

(b) The exemption provided in this section shall not apply to:

(1) Rebates, layaway sales, rain checks, or exchanges when the transactions occur before or after the tax holiday period;

(2) The rental of goods and services; and

(3) Taxable services performed on retail items.

(c) The exemption provided in this section shall apply only to businesses operating with a general excise tax license from the department.

(d) Multiple articles that are normally sold as a collective unit shall continue to be sold in that manner and shall not be priced separately and sold as individual items to qualify for the exemption.

(e) Shipping and handling charges shall be included as part of the sales price of the item.

(f) The retailer shall not be required to obtain any special license, permit, or other documentation of sales during the exemption holiday period; provided that the retailer's records shall clearly identify the type of item sold, the date the item was sold, and the sales price of the item.

(g) For purposes of this section:

"Bag" includes handbags, backpacks, fanny packs, and tote bags. The term does not include briefcases, suitcases, and other garment bags.

"Clothing" means any article of wearing apparel, including footwear, intended to be worn on or about the human body. The term shall include but not be limited to cloth and other material used to make school uniforms or other school clothing. Items normally sold in pairs, such as socks and shoes, shall not be separated to qualify for the exemption. The term shall not include watches, watchbands, jewelry, handkerchiefs, umbrellas, scarves, ties, headbands, or belt buckles.

"School supply" means binders, book bags, calculators, cellophane tape, blackboard chalk, compasses, composition books, crayons, erasers, expandable folders, pocket folders, plastic folders, manila folders, glue, paste, paste sticks, highlighters, index cards, index card boxes, legal pads, lunch boxes, markers, notebooks, loose leaf ruled notebook paper, copy paper, graph paper, tracing paper, manila paper, colored paper, poster board, construction paper, pencil boxes and other school supply boxes, pencil sharpeners, pencils, pens, protractors, rulers, scissors, correction tape, flash drives, and writing tablets. "School supply" excludes all items not listed in this definition."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________

Report Title:

General Excise Tax; Tax Holiday; School Supplies

Description:

Establishes a general excise tax holiday on school supplies, provided that businesses pass the savings on to consumers.

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

HB 2391: GENERAL EXCISE TAX; TAX HOLIDAY; SCHOOL SUPPLIES

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