Relating To General Excise Tax Exemptions For Medical Services.
Impact
If passed, HB688 would amend Chapter 237 of the Hawaii Revised Statutes by adding a new section that excludes the gross proceeds from the sale of medical services from the general excise tax. This change is significant because Hawaii is one of the few states that currently taxes medical and dental services. Exempting medical services from this tax could potentially lower the prices of healthcare services for consumers, making it easier for families to pay for medical care. This could also enhance the economic output of healthcare professionals and institutions in Hawaii, enabling them to provide better services and support more jobs.
Summary
House Bill 688, introduced in the Thirty-Second Legislature of Hawaii, focuses on exempting medical services from the general excise tax, a taxation system that is considered regressive and disproportionately impacts low-income and middle-class families. The bill highlights the high cost of living in Hawaii, which leads to increased financial strain on families, particularly with essential services such as healthcare being taxed. By eliminating this burden on medical services, the bill aims to make healthcare more affordable and accessible for residents.
Contention
The bill is likely to encounter debate among legislators regarding the implications for the state's revenue generation. Supporters argue that the tax exemption will relieve financial pressures on families and encourage better access to healthcare. However, opponents may raise concerns about the potential impact on state finances, fearing that removing this tax could result in budget shortfalls for essential services that rely on general excise tax revenue. The discussions surrounding HB688 will likely reflect a broader conversation about healthcare accessibility in relation to economic policy in Hawaii.