Relating To The General Excise Tax.
If enacted, SB389 would amend Section 237-24.3 of the Hawaii Revised Statutes to add optical, audiological, and chiropractic services to the list of tax-exempt healthcare-related goods and services. This change is expected to ease financial burdens on these practitioners, potentially leading more residents to seek care from these professionals without the added cost of excise tax. By including these additional professions in the tax exemption, the bill supports a more inclusive approach to healthcare services, reflecting evolving healthcare needs and delivering more cost-effective options for residents enrolled in federal healthcare programs.
Senate Bill 389 aims to enhance the general excise tax exemption in Hawaii established under Act 47 of 2024. Currently, Act 47 exempts certain healthcare providers, including licensed physicians, dentists, nurses, and pharmacists, from general excise tax on amounts received for goods or services rendered under Medicare, Medicaid, and TRICARE programs. SB389 seeks to broaden this exemption to include licensed optometrists, audiologists, and chiropractors, thereby promoting cost-effective healthcare outcomes for patients across the state. The bill is thus a response to the need for equitable treatment for various healthcare providers under the state tax framework.
Notable points of contention surrounding SB389 may revolve around balancing the state's tax revenue with healthcare affordability. Opponents of such tax exemptions often argue that broadening tax exemptions could impair the state's budget, particularly if the loss of revenue affects public services. Furthermore, discussions might also address whether all healthcare disciplines should be evenly treated regarding tax exemptions or if such policies should focus on urgent care providers where financial needs are most critical. Supporters typically argue that expanding these exemptions aligns with public health objectives by facilitating access to care.