Bill Text: HI HB662 | 2023 | Regular Session | Introduced
Bill Title: Relating To The General Excise Tax.
Spectrum: Partisan Bill (Democrat 11-0)
Status: (Introduced - Dead) 2023-02-15 - Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting aye with reservations; none voting no (0) and none excused (0). [HB662 Detail]
Download: Hawaii-2023-HB662-Introduced.html
HOUSE OF REPRESENTATIVES |
H.B. NO. |
662 |
THIRTY-SECOND LEGISLATURE, 2023 |
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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 legislature finds that under the
current general excise tax, there is an incongruity in the way medical service
providers are treated. Medical services
rendered at a nonprofit hospital, infirmary, or sanitarium are exempt from the
general excise tax, while the same services rendered by individual or group
practices or clinics are fully taxable.
Presently, government programs such as medicare, medicaid, and TRICARE
do not compensate for the difference created by the general excise tax, leading
to some inconsistency in the economic impact to health care providers.
Accordingly, the purpose of this Act is to exempt medical service providers who receive medicare, medicaid, and TRICARE payments from the general excise tax to encourage cost-effective patient outcomes.
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 49 U.S.C. section 40102[.]; and
(12) Amounts received by a hospital, infirmary,
medical clinic, health care facility, pharmacy, or a medical practitioner for
health care related goods or services purchased under the Medicare, Medicaid,
or TRICARE program. For the purposes of
this paragraph, the services need not be performed by a medical practitioner
but may be performed by a physician's assistant, nurse, or other employee under
the medical practitioner's direction. As
used in this paragraph:
(A) "Medical practitioner"
means a physician or osteopathic physician, licensed pursuant to chapter 453;
an advanced practice registered nurse licensed pursuant to chapter 457; or a
pharmacist licensed pursuant to chapter 461;
(B) "Medicaid" means the
program established under Title XIX of the Social Security Act of 1935, as
amended;
(C) "Medicare" means the
program established under Title XVIII of the Social Security Act of 1935, as
amended; and
(D) "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, upon its approval, shall apply to taxable years beginning after December 31, 2023.
INTRODUCED BY: |
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Report Title:
General Excise Tax; Exemption; Medicare; Medicaid; TRICARE
Description:
Exempts medical services provided by health care providers to patients who receive Medicaid, Medicare, or TRICARE benefits from the general excise tax. Applies to taxable years beginning 1/1/2024.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.