Hawaii 2022 Regular Session

Hawaii Senate Bill SB2841 Compare Versions

Only one version of the bill is available at this time.

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1	1	THE SENATE S.B. NO. 2841 THIRTY-FIRST LEGISLATURE, 2022 STATE OF HAWAII A BILL FOR AN ACT relating to taxation. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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3	3	THE SENATE S.B. NO. 2841
4	4	THIRTY-FIRST LEGISLATURE, 2022
5	5	STATE OF HAWAII
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7	7	THE SENATE
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9	9	S.B. NO.
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11	11	2841
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13	13	THIRTY-FIRST LEGISLATURE, 2022
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17	17	STATE OF HAWAII
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31	31	A BILL FOR AN ACT
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37	37	relating to taxation.
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43	43	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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47	47	PART I SECTION 1. Chapter 237, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows: "§237- Exemption of agricultural products. 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 manufacture, production, packaging, and sale of agricultural products, including but not limited to produce, dairy products, eggs, fish, and meat. §237- Exemption of over-the-counter medical products. (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: (1) Over-the-counter nonprescription medications; (2) Medical supplies; and (3) Menstrual care products. (b) For purposes of this section: "Medical supplies" means items for medical use that are suitable for use in a health care facility or in the home. "Menstrual care product" means a tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation or other genital-tract secretions. "Over-the-counter nonprescription medications" means drugs or medications that can be purchased without a prescription, such as aspirin, cough syrup, and laxatives." PART II SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§237- Luxury motor vehicles; surcharge. (a) In addition to the tax imposed by section 237-13 or any other provision in this chapter, there is levied and shall be assessed and collected an additional surcharge on the gross proceeds of sales of luxury motor vehicles. Upon every sale of a luxury motor vehicle, regardless of whether the vehicle is new or used, the amount of the surcharge shall be equal to thirty-three per cent of the gross proceeds in excess of the cap amount specified in subsection (b). All provisions of this chapter shall apply to the surcharge. With respect to the surcharge, the director of taxation shall have all the rights and powers provided under this chapter. (b) The surcharge established in subsection (a) shall be applied to the sale of luxury motor vehicles as follows: (1) For fuel-efficient vehicles, to the portion of the gross proceeds that exceeds $70,000; and (2) For all other motor vehicles, to the portion of the gross proceeds that exceeds $60,000. (c) The surcharge shall be imposed on the gross proceeds or gross income of all written contracts that require the passing on of the taxes imposed under this chapter; provided that if the gross proceeds or gross income are received as payments beginning in the taxable year in which the taxes become effective, on contracts entered into before June 30 of the year prior to the taxable year in which the taxes become effective, and the written contracts do not provide for the passing on of increased rates of taxes, the surcharge shall not be imposed on the gross proceeds or gross income covered under the written contracts. The surcharge shall be imposed on the gross proceeds or gross income from all contracts entered into on or after June 30 of the year prior to the taxable year in which the taxes become effective, regardless of whether the contract allows for the passing on of any tax or any tax increases. (d) No surcharge under this section shall be established on any: (1) Gross income or gross proceeds taxable under this chapter at the one-half per cent tax rate; (2) Gross income or gross proceeds taxable under this chapter at the 0.15 per cent tax rate; or (3) Transactions, amounts, persons, gross income, or gross proceeds exempt from tax under this chapter. (e) The director of taxation shall revise the general excise tax forms to provide for the clear and separate designation of the imposition and payment of the surcharge. (f) All taxpayers who file on a fiscal year basis whose fiscal year ends after December 31 of the year prior to the taxable year in which the taxes become effective, shall file a short period annual return for the period preceding January 1 of the taxable year in which the taxes become effective. Each fiscal year taxpayer shall also file a short period annual return for the period starting on January 1 of the taxable year in which the taxes become effective, and ending before January 1 of the following year. (g) For the purposes of this section: "Alternative fuel vehicle" has the same meaning as contained in title 10 Code of Federal Regulations part 490. "Authorized emergency vehicle" has the same meaning as defined in section 291C-1. "Electric vehicle" has the same meaning as defined in section 291-71. "Fuel-efficient vehicle" means an electric vehicle or alternative fuel vehicle. "Luxury motor vehicle" means a motor vehicle where the published manufacturer's suggested retail price, at the time of initial sale, exceeds the cap amount specified in subsection (b). "Luxury motor vehicle" does not include: (1) Trucks or vans capable of carrying more than two tons; (2) Motorhomes and campervans; (3) Authorized emergency vehicles; and (4) Vehicles specifically fitted out for transporting passengers with a disability. "Motor vehicle" has the same meaning as defined in section 286-2." SECTION 3. Chapter 238, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§238- Luxury motor vehicles; surcharge. (a) In addition to the tax imposed by section 238-2 or any other provision in this chapter, there is levied and shall be assessed and collected an additional surcharge on the value of luxury motor vehicles taxable under this chapter. Upon importation into the State, regardless of whether the vehicle is new or used, the amount of the surcharge shall be equal to thirty-three per cent of the value of the property taxable under this chapter in excess of the cap amount specified in subsection (b). All provisions of this chapter shall apply to the surcharge. With respect to the surcharge, the director of taxation shall have all the rights and powers provided under this chapter. (b) The surcharge established in subsection (a) shall be applied to the use of luxury motor vehicles as follows: (1) For fuel-efficient vehicles, to the portion of the value of the vehicle that exceeds $70,000; and (2) For all other motor vehicles, to the portion of the value of the vehicle that exceeds $60,000. (c) No surcharge under this section shall be established upon any use taxable under this chapter at the one-half per cent tax rate or upon any use that is not subject to taxation or that is exempt from taxation under this chapter. (d) The director of taxation shall revise the use tax forms to provide for the clear and separate designation of the imposition and payment of the surcharge. (e) All taxpayers who file on a fiscal year basis whose fiscal year ends after December 31 of the year prior to the taxable year in which the taxes become effective, shall file a short period annual return for the period preceding January 1 of the taxable year in which the taxes become effective. Each fiscal year taxpayer shall also file a short period annual return for the period starting on January 1 of the taxable year in which the taxes become effective, and ending before January 1 of the following year. (f) For the purposes of this section: "Alternative fuel vehicle" has the same meaning as contained in title 10 Code of Federal Regulations part 490. "Authorized emergency vehicle" has the same meaning as defined in section 291C-1. "Electric vehicle" has the same meaning as defined in section 291-71. "Fuel-efficient vehicle" means an electric vehicle or alternative fuel vehicle. "Luxury motor vehicle" means a motor vehicle where the published manufacturer's suggested retail price, at the time of initial sale, exceeds the cap amount specified in subsection (b). "Luxury motor vehicle" does not include: (1) Trucks or vans capable of carrying more than two tons; (2) Motorhomes and campervans; (3) Authorized emergency vehicles; and (4) Vehicles specifically fitted out for transporting passengers with a disability. "Motor vehicle" has the same meaning as defined in section 286-2." SECTION 4. Section 286-41, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows: "(d) The owner of every motor vehicle of the current, previous, and subsequent year model bought out-of-state, subsequently brought into the State, and subject to the use tax under chapter 238 shall provide with the application for registration proof of payment of the use tax, including all surcharges applicable under chapter 238, pursuant to requirements established by the department of taxation. No registration certificate shall be issued without proof of payment of the use tax." PART III SECTION 5. New statutory material is underscored. SECTION 6. This Act shall take effect on July 1, 2022; provided that part II shall take effect on January 1, 2023. INTRODUCED BY: _____________________________
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49	49	PART I
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51	51	SECTION 1. Chapter 237, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:
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53	53	"§237- Exemption of agricultural products. 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 manufacture, production, packaging, and sale of agricultural products, including but not limited to produce, dairy products, eggs, fish, and meat.
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55	55	§237- Exemption of over-the-counter medical products. (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:
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57	57	(1) Over-the-counter nonprescription medications;
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59	59	(2) Medical supplies; and
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61	61	(3) Menstrual care products.
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63	63	(b) For purposes of this section:
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65	65	"Medical supplies" means items for medical use that are suitable for use in a health care facility or in the home.
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67	67	"Menstrual care product" means a tampon, pad, liner, cup, sponge, or similar product used by individuals with respect to menstruation or other genital-tract secretions.
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69	69	"Over-the-counter nonprescription medications" means drugs or medications that can be purchased without a prescription, such as aspirin, cough syrup, and laxatives."
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71	71	PART II
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73	73	SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
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75	75	"§237- Luxury motor vehicles; surcharge. (a) In addition to the tax imposed by section 237-13 or any other provision in this chapter, there is levied and shall be assessed and collected an additional surcharge on the gross proceeds of sales of luxury motor vehicles. Upon every sale of a luxury motor vehicle, regardless of whether the vehicle is new or used, the amount of the surcharge shall be equal to thirty-three per cent of the gross proceeds in excess of the cap amount specified in subsection (b). All provisions of this chapter shall apply to the surcharge. With respect to the surcharge, the director of taxation shall have all the rights and powers provided under this chapter.
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77	77	(b) The surcharge established in subsection (a) shall be applied to the sale of luxury motor vehicles as follows:
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79	79	(1) For fuel-efficient vehicles, to the portion of the gross proceeds that exceeds $70,000; and
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81	81	(2) For all other motor vehicles, to the portion of the gross proceeds that exceeds $60,000.
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83	83	(c) The surcharge shall be imposed on the gross proceeds or gross income of all written contracts that require the passing on of the taxes imposed under this chapter; provided that if the gross proceeds or gross income are received as payments beginning in the taxable year in which the taxes become effective, on contracts entered into before June 30 of the year prior to the taxable year in which the taxes become effective, and the written contracts do not provide for the passing on of increased rates of taxes, the surcharge shall not be imposed on the gross proceeds or gross income covered under the written contracts. The surcharge shall be imposed on the gross proceeds or gross income from all contracts entered into on or after June 30 of the year prior to the taxable year in which the taxes become effective, regardless of whether the contract allows for the passing on of any tax or any tax increases.
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85	85	(d) No surcharge under this section shall be established on any:
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87	87	(1) Gross income or gross proceeds taxable under this chapter at the one-half per cent tax rate;
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89	89	(2) Gross income or gross proceeds taxable under this chapter at the 0.15 per cent tax rate; or
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91	91	(3) Transactions, amounts, persons, gross income, or gross proceeds exempt from tax under this chapter.
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93	93	(e) The director of taxation shall revise the general excise tax forms to provide for the clear and separate designation of the imposition and payment of the surcharge.
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95	95	(f) All taxpayers who file on a fiscal year basis whose fiscal year ends after December 31 of the year prior to the taxable year in which the taxes become effective, shall file a short period annual return for the period preceding January 1 of the taxable year in which the taxes become effective. Each fiscal year taxpayer shall also file a short period annual return for the period starting on January 1 of the taxable year in which the taxes become effective, and ending before January 1 of the following year.
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97	97	(g) For the purposes of this section:
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99	99	"Alternative fuel vehicle" has the same meaning as contained in title 10 Code of Federal Regulations part 490.
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101	101	"Authorized emergency vehicle" has the same meaning as defined in section 291C-1.
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103	103	"Electric vehicle" has the same meaning as defined in section 291-71.
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105	105	"Fuel-efficient vehicle" means an electric vehicle or alternative fuel vehicle.
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107	107	"Luxury motor vehicle" means a motor vehicle where the published manufacturer's suggested retail price, at the time of initial sale, exceeds the cap amount specified in subsection (b).
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109	109	"Luxury motor vehicle" does not include:
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111	111	(1) Trucks or vans capable of carrying more than two tons;
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113	113	(2) Motorhomes and campervans;
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115	115	(3) Authorized emergency vehicles; and
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117	117	(4) Vehicles specifically fitted out for transporting passengers with a disability.
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119	119	"Motor vehicle" has the same meaning as defined in section 286-2."
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121	121	SECTION 3. Chapter 238, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:
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123	123	"§238- Luxury motor vehicles; surcharge. (a) In addition to the tax imposed by section 238-2 or any other provision in this chapter, there is levied and shall be assessed and collected an additional surcharge on the value of luxury motor vehicles taxable under this chapter. Upon importation into the State, regardless of whether the vehicle is new or used, the amount of the surcharge shall be equal to thirty-three per cent of the value of the property taxable under this chapter in excess of the cap amount specified in subsection (b). All provisions of this chapter shall apply to the surcharge. With respect to the surcharge, the director of taxation shall have all the rights and powers provided under this chapter.
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125	125	(b) The surcharge established in subsection (a) shall be applied to the use of luxury motor vehicles as follows:
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127	127	(1) For fuel-efficient vehicles, to the portion of the value of the vehicle that exceeds $70,000; and
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129	129	(2) For all other motor vehicles, to the portion of the value of the vehicle that exceeds $60,000.
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131	131	(c) No surcharge under this section shall be established upon any use taxable under this chapter at the one-half per cent tax rate or upon any use that is not subject to taxation or that is exempt from taxation under this chapter.
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133	133	(d) The director of taxation shall revise the use tax forms to provide for the clear and separate designation of the imposition and payment of the surcharge.
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135	135	(e) All taxpayers who file on a fiscal year basis whose fiscal year ends after December 31 of the year prior to the taxable year in which the taxes become effective, shall file a short period annual return for the period preceding January 1 of the taxable year in which the taxes become effective. Each fiscal year taxpayer shall also file a short period annual return for the period starting on January 1 of the taxable year in which the taxes become effective, and ending before January 1 of the following year.
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137	137	(f) For the purposes of this section:
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139	139	"Alternative fuel vehicle" has the same meaning as contained in title 10 Code of Federal Regulations part 490.
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141	141	"Authorized emergency vehicle" has the same meaning as defined in section 291C-1.
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143	143	"Electric vehicle" has the same meaning as defined in section 291-71.
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145	145	"Fuel-efficient vehicle" means an electric vehicle or alternative fuel vehicle.
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147	147	"Luxury motor vehicle" means a motor vehicle where the published manufacturer's suggested retail price, at the time of initial sale, exceeds the cap amount specified in subsection (b).
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149	149	"Luxury motor vehicle" does not include:
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151	151	(1) Trucks or vans capable of carrying more than two tons;
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153	153	(2) Motorhomes and campervans;
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155	155	(3) Authorized emergency vehicles; and
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157	157	(4) Vehicles specifically fitted out for transporting passengers with a disability.
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159	159	"Motor vehicle" has the same meaning as defined in section 286-2."
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161	161	SECTION 4. Section 286-41, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
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163	163	"(d) The owner of every motor vehicle of the current, previous, and subsequent year model bought out-of-state, subsequently brought into the State, and subject to the use tax under chapter 238 shall provide with the application for registration proof of payment of the use tax, including all surcharges applicable under chapter 238, pursuant to requirements established by the department of taxation. No registration certificate shall be issued without proof of payment of the use tax."
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165	165	PART III
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167	167	SECTION 5. New statutory material is underscored.
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169	169	SECTION 6. This Act shall take effect on July 1, 2022; provided that part II shall take effect on January 1, 2023.
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173	173	INTRODUCED BY: _____________________________
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175	175	INTRODUCED BY:
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177	177	_____________________________
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183	183	Report Title: Taxation; General Excise Tax; Use Tax; Exemption; Agricultural Products; Over-The-Counter Drugs, Medical Supplies, and Menstrual Products; Surcharge; Luxury Cars Description: Exempts agricultural products, including produce, meat, and fish, from the general excise tax. Exempts over-the-counter drugs, medical supplies, and menstrual products from the general excise tax. Establishes a surcharge on the general excise tax and use tax for the sale or use of luxury cars. The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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189	189	Report Title:
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191	191	Taxation; General Excise Tax; Use Tax; Exemption; Agricultural Products; Over-The-Counter Drugs, Medical Supplies, and Menstrual Products; Surcharge; Luxury Cars
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195	195	Description:
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197	197	Exempts agricultural products, including produce, meat, and fish, from the general excise tax. Exempts over-the-counter drugs, medical supplies, and menstrual products from the general excise tax. Establishes a surcharge on the general excise tax and use tax for the sale or use of luxury cars.
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205	205	The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.