Hawaii 2025 Regular Session

Hawaii Senate Bill SB389 Compare Versions

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

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1	1	THE SENATE S.B. NO. 389 THIRTY-THIRD LEGISLATURE, 2025 STATE OF HAWAII A BILL FOR AN ACT RELATING TO THE GENERAL EXCISE TAX. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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3	3	THE SENATE S.B. NO. 389
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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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 THE GENERAL EXCISE TAX.
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43	43	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
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47	47	SECTION 1. The legislature finds that Act 47, Session Laws of Hawaii 2024 (Act 47), scheduled to take effect on January 1, 2026, exempts from general excise tax, amounts received by licensed physicians, osteopathic physicians, dentists, advanced practice registered nurses, and pharmacists for healthcare-related goods or services under the medicare, medicaid, and TRICARE programs to encourage cost-effective patient outcomes. The purpose of this Act is to expand this general excise tax exemption to licensed optometrists, audiologists, and chiropractors to further encourage cost-effective patient outcomes. SECTION 2. Act 47, Session Laws of Hawaii 2024, is amended by amending section 2 to read as follows: "SECTION 2. Section 237-24.3, Hawaii Revised Statutes, is amended to read as follows: "§237-24.3 Additional amounts not taxable. In addition to the amounts not taxable under section 237-24, this chapter shall not apply to: (1) Amounts received from the loading, transportation, and unloading of agricultural commodities shipped for a producer or produce dealer on one island of this State to a person, firm, or organization on another island of this State. The terms "agricultural commodity", "producer", and "produce dealer" shall be defined in the same manner as they are defined in section 147-1; provided that agricultural commodities need not have been produced in the State; (2) Amounts received by the manager, submanager, or board of directors of: (A) An association of a condominium property regime established in accordance with chapter 514B or any predecessor thereto; or (B) A nonprofit homeowners or community association incorporated in accordance with chapter 414D or any predecessor thereto and existing pursuant to covenants running with the land, in reimbursement of sums paid for common expenses; (3) Amounts received or accrued from: (A) The loading or unloading of cargo from ships, barges, vessels, or aircraft, including stevedoring services as defined in section 382-1, whether or not the ships, barges, vessels, or aircraft travel between the State and other states or countries or between the islands of the State; (B) Tugboat services including pilotage fees performed within the State, and the towage of ships, barges, or vessels in and out of state harbors, or from one pier to another; (C) The transportation of pilots or governmental officials to ships, barges, or vessels offshore; rigging gear; checking freight and similar services; standby charges; and use of moorings and running mooring lines; and (D) Wharfage and demurrage imposed under chapter 266 that is paid to the department of transportation; (4) Amounts received by an employee benefit plan by way of contributions, dividends, interest, and other income; and amounts received by a nonprofit organization or office, as payments for costs and expenses incurred for the administration of an employee benefit plan; provided that this exemption shall not apply to any gross rental income or gross rental proceeds received after June 30, 1994, as income from investments in real property in this State; and provided further that gross rental income or gross rental proceeds from investments in real property received by an employee benefit plan after June 30, 1994, under written contracts executed prior to July 1, 1994, shall not be taxed until the contracts are renegotiated, renewed, or extended, or until after December 31, 1998, whichever is earlier. For the purposes of this paragraph, "employee benefit plan" means any plan as defined in title 29 United States Code section 1002(3), as amended; (5) Amounts received for purchases made with United States Department of Agriculture food coupons under the federal food stamp program, and amounts received for purchases made with United States Department of Agriculture food vouchers under the Special Supplemental Foods Program for Women, Infants and Children; (6) Amounts received by a hospital, infirmary, medical clinic, health care facility, pharmacy, or a practitioner licensed to administer the drug to an individual for selling prescription drugs or prosthetic devices to an individual; provided that this paragraph shall not apply to any amounts received for services provided in selling prescription drugs or prosthetic devices. As used in this paragraph: "Prescription drugs" are those drugs defined under section 328-1 and dispensed by filling or refilling a written or oral prescription by a practitioner licensed under law to administer the drug and sold by a licensed pharmacist under section 328-16 or practitioners licensed to administer drugs; provided that "prescription drugs" shall not include cannabis or manufactured cannabis products authorized pursuant to chapters 329 and 329D; and "Prosthetic device" means any artificial device or appliance, instrument, apparatus, or contrivance, including their components, parts, accessories, and replacements thereof, used to replace a missing or surgically removed part of the human body, which is prescribed by a licensed practitioner of medicine, osteopathy, or podiatry and that is sold by the practitioner or that is dispensed and sold by a dealer of prosthetic devices; provided that "prosthetic device" shall not mean any auditory, ophthalmic, dental, or ocular device or appliance, instrument, apparatus, or contrivance; (7) Taxes on transient accommodations imposed by chapter 237D and passed on and collected by operators holding certificates of registration under that chapter; (8) Amounts received as dues by an unincorporated merchants association from its membership for advertising media, promotional, and advertising costs for the promotion of the association for the benefit of its members as a whole and not for the benefit of an individual member or group of members less than the entire membership; (9) Amounts received by a labor organization for real property leased to: (A) A labor organization; or (B) A trust fund established by a labor organization for the benefit of its members, families, and dependents for medical or hospital care, pensions on retirement or death of employees, apprenticeship and training, and other membership service programs. As used in this paragraph, "labor organization" means a labor organization exempt from federal income tax under section 501(c)(5) of the Internal Revenue Code, as amended; (10) Amounts received from foreign diplomats and consular officials who are holding cards issued or authorized by the United States Department of State granting them an exemption from state taxes; [and] (11) Amounts received as rent for the rental or leasing of aircraft or aircraft engines used by the lessees or renters for interstate air transportation of passengers and goods. For purposes of this paragraph, payments made pursuant to a lease shall be considered rent regardless of whether the lease is an operating lease or a financing lease. The definition of "interstate air transportation" is the same as in title 49 [U.S.C.] United States Code section 40102[.]; and (12) Amounts received by a hospital, infirmary, medical clinic, health care facility, or pharmacy, or a medical or dental practitioner, for healthcare-related goods or services purchased under the medicare, medicaid, or TRICARE programs. For the purposes of this paragraph, the healthcare-related services need not be performed by a medical or dental practitioner but may be performed by a physician's assistant, nurse, or other employee under the medical or dental practitioner's direction. As used in this paragraph: "Medicaid" means the program established under Title XIX of the Social Security Act of 1935, as amended; "Medical or dental practitioner" means a physician or osteopathic physician licensed pursuant to chapter 453; a dentist licensed under chapter 448; an advanced practice registered nurse licensed pursuant to chapter 457; a pharmacist licensed pursuant to chapter 461; an optometrist licensed pursuant to chapter 459; an audiologist licensed pursuant to chapter 468E; or a chiropractor licensed pursuant to chapter 442. "Medicare" means the program established under Title XVIII of the Social Security Act of 1935, as amended; and "TRICARE" means the program of the Department of Defense military health system managed by the Defense Health Agency, or any successor program."" SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored. SECTION 4. This Act shall take effect upon its approval. INTRODUCED BY: _____________________________
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49	49	SECTION 1. The legislature finds that Act 47, Session Laws of Hawaii 2024 (Act 47), scheduled to take effect on January 1, 2026, exempts from general excise tax, amounts received by licensed physicians, osteopathic physicians, dentists, advanced practice registered nurses, and pharmacists for healthcare-related goods or services under the medicare, medicaid, and TRICARE programs to encourage cost-effective patient outcomes.
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51	51	The purpose of this Act is to expand this general excise tax exemption to licensed optometrists, audiologists, and chiropractors to further encourage cost-effective patient outcomes.
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53	53	SECTION 2. Act 47, Session Laws of Hawaii 2024, is amended by amending section 2 to read as follows:
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55	55	"SECTION 2. Section 237-24.3, Hawaii Revised Statutes, is amended to read as follows:
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57	57	"§237-24.3 Additional amounts not taxable. In addition to the amounts not taxable under section 237-24, this chapter shall not apply to:
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59	59	(1) Amounts received from the loading, transportation, and unloading of agricultural commodities shipped for a producer or produce dealer on one island of this State to a person, firm, or organization on another island of this State. The terms "agricultural commodity", "producer", and "produce dealer" shall be defined in the same manner as they are defined in section 147-1; provided that agricultural commodities need not have been produced in the State;
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61	61	(2) Amounts received by the manager, submanager, or board of directors of:
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63	63	(A) An association of a condominium property regime established in accordance with chapter 514B or any predecessor thereto; or
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65	65	(B) A nonprofit homeowners or community association incorporated in accordance with chapter 414D or any predecessor thereto and existing pursuant to covenants running with the land,
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67	67	in reimbursement of sums paid for common expenses;
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69	69	(3) Amounts received or accrued from:
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71	71	(A) The loading or unloading of cargo from ships, barges, vessels, or aircraft, including stevedoring services as defined in section 382-1, whether or not the ships, barges, vessels, or aircraft travel between the State and other states or countries or between the islands of the State;
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73	73	(B) Tugboat services including pilotage fees performed within the State, and the towage of ships, barges, or vessels in and out of state harbors, or from one pier to another;
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75	75	(C) The transportation of pilots or governmental officials to ships, barges, or vessels offshore; rigging gear; checking freight and similar services; standby charges; and use of moorings and running mooring lines; and
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77	77	(D) Wharfage and demurrage imposed under chapter 266 that is paid to the department of transportation;
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79	79	(4) Amounts received by an employee benefit plan by way of contributions, dividends, interest, and other income; and amounts received by a nonprofit organization or office, as payments for costs and expenses incurred for the administration of an employee benefit plan; provided that this exemption shall not apply to any gross rental income or gross rental proceeds received after June 30, 1994, as income from investments in real property in this State; and provided further that gross rental income or gross rental proceeds from investments in real property received by an employee benefit plan after June 30, 1994, under written contracts executed prior to July 1, 1994, shall not be taxed until the contracts are renegotiated, renewed, or extended, or until after December 31, 1998, whichever is earlier. For the purposes of this paragraph, "employee benefit plan" means any plan as defined in title 29 United States Code section 1002(3), as amended;
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81	81	(5) Amounts received for purchases made with United States Department of Agriculture food coupons under the federal food stamp program, and amounts received for purchases made with United States Department of Agriculture food vouchers under the Special Supplemental Foods Program for Women, Infants and Children;
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83	83	(6) Amounts received by a hospital, infirmary, medical clinic, health care facility, pharmacy, or a practitioner licensed to administer the drug to an individual for selling prescription drugs or prosthetic devices to an individual; provided that this paragraph shall not apply to any amounts received for services provided in selling prescription drugs or prosthetic devices. As used in this paragraph:
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85	85	"Prescription drugs" are those drugs defined under section 328-1 and dispensed by filling or refilling a written or oral prescription by a practitioner licensed under law to administer the drug and sold by a licensed pharmacist under section 328-16 or practitioners licensed to administer drugs; provided that "prescription drugs" shall not include cannabis or manufactured cannabis products authorized pursuant to chapters 329 and 329D; and
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87	87	"Prosthetic device" means any artificial device or appliance, instrument, apparatus, or contrivance, including their components, parts, accessories, and replacements thereof, used to replace a missing or surgically removed part of the human body, which is prescribed by a licensed practitioner of medicine, osteopathy, or podiatry and that is sold by the practitioner or that is dispensed and sold by a dealer of prosthetic devices; provided that "prosthetic device" shall not mean any auditory, ophthalmic, dental, or ocular device or appliance, instrument, apparatus, or contrivance;
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89	89	(7) Taxes on transient accommodations imposed by chapter 237D and passed on and collected by operators holding certificates of registration under that chapter;
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91	91	(8) Amounts received as dues by an unincorporated merchants association from its membership for advertising media, promotional, and advertising costs for the promotion of the association for the benefit of its members as a whole and not for the benefit of an individual member or group of members less than the entire membership;
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93	93	(9) Amounts received by a labor organization for real property leased to:
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95	95	(A) A labor organization; or
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97	97	(B) A trust fund established by a labor organization for the benefit of its members, families, and dependents for medical or hospital care, pensions on retirement or death of employees, apprenticeship and training, and other membership service programs.
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99	99	As used in this paragraph, "labor organization" means a labor organization exempt from federal income tax under section 501(c)(5) of the Internal Revenue Code, as amended;
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101	101	(10) Amounts received from foreign diplomats and consular officials who are holding cards issued or authorized by the United States Department of State granting them an exemption from state taxes; [and]
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103	103	(11) Amounts received as rent for the rental or leasing of aircraft or aircraft engines used by the lessees or renters for interstate air transportation of passengers and goods. For purposes of this paragraph, payments made pursuant to a lease shall be considered rent regardless of whether the lease is an operating lease or a financing lease. The definition of "interstate air transportation" is the same as in title 49 [U.S.C.] United States Code section 40102[.]; and
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105	105	(12) Amounts received by a hospital, infirmary, medical clinic, health care facility, or pharmacy, or a medical or dental practitioner, for healthcare-related goods or services purchased under the medicare, medicaid, or TRICARE programs. For the purposes of this paragraph, the healthcare-related services need not be performed by a medical or dental practitioner but may be performed by a physician's assistant, nurse, or other employee under the medical or dental practitioner's direction. As used in this paragraph:
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107	107	"Medicaid" means the program established under Title XIX of the Social Security Act of 1935, as amended;
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109	109	"Medical or dental practitioner" means a physician or osteopathic physician licensed pursuant to chapter 453; a dentist licensed under chapter 448; an advanced practice registered nurse licensed pursuant to chapter 457; a pharmacist licensed pursuant to chapter 461; an optometrist licensed pursuant to chapter 459; an audiologist licensed pursuant to chapter 468E; or a chiropractor licensed pursuant to chapter 442.
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111	111	"Medicare" means the program established under Title XVIII of the Social Security Act of 1935, as amended; and
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113	113	"TRICARE" means the program of the Department of Defense military health system managed by the Defense Health Agency, or any successor program.""
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115	115	SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
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117	117	SECTION 4. This Act shall take effect upon its approval.
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121	121	INTRODUCED BY: _____________________________
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123	123	INTRODUCED BY:
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131	131	Report Title: General Excise Tax; Exemption; Medicaid; Medicare; TRICARE; Optometrists; Audiologists; Chiropractors; Act 47 (2024) Description: Expands the general excise tax exemption established by Act 47, Session Laws of Hawaii 2024, to include amounts received by optometrists, audiologists, and chiropractors, for healthcare-related goods or services purchased under the Medicare, Medicaid, and TRICARE programs. 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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139	139	Report Title:
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141	141	General Excise Tax; Exemption; Medicaid; Medicare; TRICARE; Optometrists; Audiologists; Chiropractors; Act 47 (2024)
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145	145	Description:
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147	147	Expands the general excise tax exemption established by Act 47, Session Laws of Hawaii 2024, to include amounts received by optometrists, audiologists, and chiropractors, for healthcare-related goods or services purchased under the Medicare, Medicaid, and TRICARE programs.
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155	155	The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.