Bill Text: HI HB329 | 2014 | Regular Session | Introduced
Bill Title: General Excise Tax; Exemption for Certain Scientific Contracts with the United States
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2013-12-18 - Carried over to 2014 Regular Session. [HB329 Detail]
Download: Hawaii-2014-HB329-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
329 |
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TWENTY-SEVENTH LEGISLATURE, 2013 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to the general excise tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The general excise tax exemption for scientific contracts with the United States was intended to allow local contractors to compete with out-of-state entities for scientific contracts with federal facilities. However, the legislature finds that over ninety-eight per cent of these contracts are currently held by out-of-state entities that pay no tax pursuant to this provision. Further, the exemption has created a large administrative burden for the department of taxation, resulting in ten per cent of its audit staff being used to evaluate claims for this exemption.
SECTION 2. Section 237-26, Hawaii Revised Statutes, is amended to read as follows:
"§237-26 Exemption of certain
scientific contracts with the United States. (a) Any provision of law to
the contrary notwithstanding, there shall be exempted from the measure of the
taxes imposed by chapter 237, [all of the] gross proceeds [derived by
a contractor or subcontractor arising from the performance of any scientific
work as defined in subsection (b), under a contract or subcontract entered into
with the United States (including any agency or instrumentality thereof but not
including national banks), and all of the gross proceeds derived from the sale
of tangible personal property by a seller of such tangible personal property to
such contractor or subcontractor; provided the exemption herein shall apply
only to such tangible personal property which is to be affixed to, or to become
a physical, integral part of the scientific facility, or which is to be
entirely consumed during the performance of the service required by the
contract or subcontract.] received under a contract or subcontract
entered into with the United States (including any agency or instrumentality
thereof but not including national banks) in an amount equal to "qualified
research expenses for the taxable year over the base amount", "basic
research payments determined under Internal Revenue Code section
41(e)(1)(A)", and "amounts paid or incurred by the taxpayer in
carrying on any trade or business of the taxpayer during the taxable year
(including as contributions) to an energy research consortium for energy
research". Gross proceeds exempted under this section shall not exceed
the amount properly claimed and allowable under section 41 of the Internal Revenue
Code for the same taxable period.
(b) For purposes of this section, ["scientific
work" is work involving primarily the research and development for, or the
design, manufacture, instrumentation, installation, maintenance, or operation
of aerospace, agricultural, astronomical, biomedical, electronic, geophysical,
oceanographic, test range, or other scientific facilities. Maintenance or
operation, for purposes of this section, shall include housekeeping functions
in providing certain nonscientific logistic and support services.] "qualified
research expenses for the taxable year over the base amount", "basic
research payments determined under Internal Revenue Code section
41(e)(1)(A)", and "amounts paid or incurred by the taxpayer in
carrying on any trade or business of the taxpayer during the taxable year
(including as contributions) to an energy research consortium for energy
research" shall have the same meaning as under section 41 of the Internal
Revenue Code and its judicial and administrative interpretations."
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on January 1, 2014.
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INTRODUCED BY: |
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Report Title:
General Excise Tax; Exemption for Certain Scientific Contracts with the United States
Description:
Narrows the scope of gross proceeds to which the general excise tax exemption for certain scientific contracts with the United States applies.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
