Hawaii 2025 Regular Session

Hawaii Senate Bill SB1534 Compare Versions

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1	1	THE SENATE S.B. NO. 1534 THIRTY-THIRD LEGISLATURE, 2025 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. 1534
4	4	THIRTY-THIRD LEGISLATURE, 2025
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	1534
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13	13	THIRTY-THIRD LEGISLATURE, 2025
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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 a new section to be appropriately designated and to read as follows: "§237- Exemption for diapers. (a) There shall be exempted from, and excluded from the measure of, the taxes imposed by this chapter all the gross proceeds or income arising from the manufacture, production, packaging, and sale of diapers within the State. (b) As used in this section, "diaper" means an absorbent garment that: (1) Is washable or disposable; and (2) If disposable: (A) Does not use any latex or common allergens; and (B) Meets or exceeds the quality standards for diapers commercially available through retail sale in the following categories: (i) Absorbency (with acceptable rates for first and second wetting); (ii) Waterproof outer cover; (iii) Flexible leg openings; and (iv) Refastening closures." 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 a 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 fifty per cent of the sum of all applicable taxes imposed under this chapter on the gross proceeds of sales of luxury motor vehicles. 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 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 before 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 before 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. (c) 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. (d) 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. (e) All taxpayers who file on a fiscal year basis whose fiscal year ends after December 31 of the year before 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: "Authorized emergency vehicle" has the same meaning as in section 291C-1. "Luxury motor vehicle" means a motor vehicle where the published manufacturer's suggested retail price, at the time of initial sale, is $ or more. "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 for transporting passengers with a disability. "Motor vehicle" has the same meaning as 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 a 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 fifty per cent of the sum of all applicable taxes imposed on the value of luxury vehicles under this chapter. 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) 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. (c) 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. (d) All taxpayers who file on a fiscal year basis whose fiscal year ends after December 31 of the year before 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. (e) For the purposes of this section: "Authorized emergency vehicle" has the same meaning as in section 291C-1. "Luxury motor vehicle" means a motor vehicle where the published manufacturer's suggested retail price, at the time of initial sale, is $ or more. "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 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. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 6. This Act shall take effect on July 1, 2025; provided that part II shall take effect on January 1, 2026. 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 a new section to be appropriately designated and to read as follows:
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53	53	"§237- Exemption for diapers. (a) There shall be exempted from, and excluded from the measure of, the taxes imposed by this chapter all the gross proceeds or income arising from the manufacture, production, packaging, and sale of diapers within the State.
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55	55	(b) As used in this section, "diaper" means an absorbent garment that:
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57	57	(1) Is washable or disposable; and
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59	59	(2) If disposable:
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61	61	(A) Does not use any latex or common allergens; and
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63	63	(B) Meets or exceeds the quality standards for diapers commercially available through retail sale in the following categories:
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65	65	(i) Absorbency (with acceptable rates for first and second wetting);
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67	67	(ii) Waterproof outer cover;
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69	69	(iii) Flexible leg openings; and
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71	71	(iv) Refastening closures."
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73	73	PART II
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75	75	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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77	77	"§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 a 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 fifty per cent of the sum of all applicable taxes imposed under this chapter on the gross proceeds of sales of luxury motor vehicles. 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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79	79	(b) 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 before 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 before 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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81	81	(c) No surcharge under this section shall be established on any:
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83	83	(1) Gross income or gross proceeds taxable under this chapter at the one-half per cent tax rate;
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85	85	(2) Gross income or gross proceeds taxable under this chapter at the 0.15 per cent tax rate; or
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87	87	(3) Transactions, amounts, persons, gross income, or gross proceeds exempt from tax under this chapter.
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89	89	(d) 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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91	91	(e) All taxpayers who file on a fiscal year basis whose fiscal year ends after December 31 of the year before 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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93	93	(f) For the purposes of this section:
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95	95	"Authorized emergency vehicle" has the same meaning as in section 291C-1.
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97	97	"Luxury motor vehicle" means a motor vehicle where the published manufacturer's suggested retail price, at the time of initial sale, is $ or more. "Luxury motor vehicle" does not include:
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99	99	(1) Trucks or vans capable of carrying more than two tons;
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101	101	(2) Motorhomes and campervans;
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103	103	(3) Authorized emergency vehicles; and
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105	105	(4) Vehicles specifically fitted for transporting passengers with a disability.
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107	107	"Motor vehicle" has the same meaning as in section 286-2."
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109	109	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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111	111	"§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 a 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 fifty per cent of the sum of all applicable taxes imposed on the value of luxury vehicles under this chapter. 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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113	113	(b) 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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115	115	(c) 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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117	117	(d) All taxpayers who file on a fiscal year basis whose fiscal year ends after December 31 of the year before 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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119	119	(e) For the purposes of this section:
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121	121	"Authorized emergency vehicle" has the same meaning as in section 291C-1.
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123	123	"Luxury motor vehicle" means a motor vehicle where the published manufacturer's suggested retail price, at the time of initial sale, is $ or more. "Luxury motor vehicle" does not include:
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125	125	(1) Trucks or vans capable of carrying more than two tons;
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127	127	(2) Motorhomes and campervans;
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129	129	(3) Authorized emergency vehicles; and
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131	131	(4) Vehicles specifically fitted out for transporting passengers with a disability.
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133	133	"Motor vehicle" has the same meaning as in section 286-2."
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135	135	SECTION 4. Section 286-41, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:
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137	137	"(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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139	139	PART III
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141	141	SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
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143	143	SECTION 6. This Act shall take effect on July 1, 2025; provided that part II shall take effect on January 1, 2026.
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147	147	INTRODUCED BY: _____________________________
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149	149	INTRODUCED BY:
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157	157	Report Title: General Excise Tax; Exemption; Diapers; Luxury Car Surcharge; Use Tax Description: Establishes a general excise tax exemption for the gross proceeds or income from the manufacture, production, packaging, and sale of diapers. 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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163	163	Report Title:
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165	165	General Excise Tax; Exemption; Diapers; Luxury Car Surcharge; Use Tax
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169	169	Description:
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171	171	Establishes a general excise tax exemption for the gross proceeds or income from the manufacture, production, packaging, and sale of diapers. Establishes a surcharge on the general excise tax and use tax for the sale or use of luxury cars.
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179	179	The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.