Bill Text: HI SB1053 | 2024 | Regular Session | Introduced
Bill Title: Relating To General Excise Tax Exemptions.
Spectrum: Partisan Bill (Democrat 5-0)
Status: (Introduced) 2023-12-11 - Carried over to 2024 Regular Session. [SB1053 Detail]
Download: Hawaii-2024-SB1053-Introduced.html
|
THE SENATE |
S.B. NO. |
1053 |
|
THIRTY-SECOND LEGISLATURE, 2023 |
|
|
|
STATE OF HAWAII |
|
|
|
|
|
|
|
|
||
|
|
||
A BILL FOR AN ACT
relating to GENERAL EXCISE TAX EXEMPTIONS.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
The legislature further finds that exempting groceries and nonprescription drugs from the general excise tax will help many families that have been negatively impacted by the COVID-19 pandemic and allow them to put food on the table and maintain the health of their families. Additionally, those who save money on groceries and nonprescription drug purchases will be able to spend that money elsewhere in the economy, thus allowing the money to continue to circulate, which will help many businesses and continue to generate revenue for the State.
The legislature further finds that thirty-two states, plus the District of Columbia, currently exempt most foods purchased for consumption at home from the state sales tax. Thirteen states impose levies on groceries. Seven states tax groceries at the level of the ordinary tax rate, including Alabama, Mississippi, South Dakota, Hawaii, Idaho, Kansas, and Oklahoma. The other six states, Arkansas, Illinois, Missouri, Tennessee, Utah, and Virginia, tax groceries at reduced rates. Grocery sales tax is often considered regressive and disproportionately hurts working families and may affect the quality, diversity, and even the amount of food they can afford to put on the table, especially during a pandemic.
A recent study from the Charles H. Dyson School of Applied Economics and Management at Cornell University finds that even a slight grocery tax rate increase correlates to an increased likelihood of food insecurity and a higher risk of hunger in households. Exempting food and medicine from the general excise tax is a step that the State can take to substantially and positively combat food insecurity and the resiliency crisis. Taxing food not only hurts those living paycheck to paycheck, but it also erodes savings and investment opportunities for the middle class and makes Hawaii a much less desirable place to start a food-related business. This is therefore a priority issue for the State.
The legislature also finds that Senate Bill
No. 608, Regular Session of 2021 (Senate Bill No. 608), established a general
excise tax exemption from the sale of certain groceries and nonprescription
drugs. The department of taxation testified
that Senate Bill No. 608 would cost the State an average of $230 million per
year. More information is needed about
how this estimate was derived.
Furthermore, a more formal scoring of Senate Bill No. 608 is required to
accurately estimate the projected fiscal impact to the State so that an
appropriate offset in the form of reducing expenditures and for those savings
to be spent elsewhere generating additional income from new food-based revenue
sources may be developed.
Accordingly, the purpose of this Act is to:
(1) Establish a general excise tax exemption for the gross proceeds or income from the sale of groceries that are eligible under the Supplemental Nutrition Assistance Program or Special Supplemental Nutrition Program for Women, Infants, and Children; and
(2) Establish a general excise tax exemption for the gross proceeds or income from the sale of nonprescription drugs.
SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding two new sections to be appropriately designated and to read as follows:
"§237- Exemption for eligible groceries. (a)
There shall be exempted from, and excluded from the measure of, the
taxes imposed by this chapter all of the gross proceeds or income received from
the sale of all groceries eligible for purchase under the Supplemental
Nutrition Assistance Program and Special Supplemental Nutrition Program for
Women, Infants, and Children within the State, regardless of the means of
purchase and the eligibility of the purchaser for Supplemental Nutrition
Assistance Program or Special Supplemental Nutrition Program for Women,
Infants, and Children benefits.
(b) For the purposes of this section:
"Food"
or "food product" means substances, whether in liquid, concentrated,
solid, frozen, dried, or dehydrated form, that are sold for ingestion or
chewing by humans and are consumed for their taste or nutritional value.
"Groceries"
means any food or food product for home consumption. "Groceries" may be further defined
by the department of taxation by rule or tax information release; provided that
the department shall consult with the federal Food and Nutrition Service of the
United States Department of Agriculture in further defining the term
"groceries" for purposes of the Supplemental Nutrition Assistance
Program and Special Supplemental Nutrition Program for Women, Infants, and
Children.
§237- Exemption for nonprescription drugs. (a)
There shall be exempted from, and excluded from the measure of, the
taxes imposed by this chapter all of the gross proceeds or income received from
the sale of nonprescription drugs.
(b) For the purposes of this section:
"Drug"
means:
(1) Articles recognized in the official
United States Pharmacopoeia, official United States Pharmacopoeia Dispensing
Information, official Homeopathic Pharmacopoeia of the United States, or
official National Formulary, or any supplement to any of these publications;
(2) Articles intended for use in the
diagnosis, cure, mitigation, treatment, or prevention of disease in humans or
animals;
(3) Articles, other than food or
clothing, intended to affect the structure or any function of the body of
humans or animals; or
(4) Articles intended for use as a
component of any article specified in paragraph (1), (2), or (3); provided that
the term "drug" does not include devices or their components, parts
or accessories, cosmetics, or liquor as defined in section 281-1.
"Nonprescription drug" means any packaged, bottled, or nonbulk chemical, drug, or medicine that may be lawfully sold without a practitioner's order."
SECTION 3. New statutory material is underscored.
SECTION 4. This Act shall take effect on January 1, 2024.
|
INTRODUCED BY: |
_____________________________ |
|
|
|
Report Title:
General Excise Tax; Exemption Groceries; Nonprescription Drugs;
Exemption
Description:
Establishes a general excise tax exemption for the gross proceeds or income from the sale of groceries that are eligible under the Supplemental Nutrition Assistance Program or Special Supplemental Nutrition Program for Women, Infants, and Children, regardless of the means of purchase and the program eligibility of the purchaser. Establishes a general excise tax exemption for the gross proceeds or income from the sale of nonprescription drugs. Effective January 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.
