by Andrew Walden

The Senate Ways and Means Committee reconvened this morning after scores of Hawaii business leaders, taxpayers and some nonprofit organizations testified against two different proposals to increase the GE Tax.  The committee removed language from HB 793 calling for an across the board increase in the GE Tax and then passed the bill out of committee with language removing various GE Tax exemptions intact. 

These GE Tax hikes will reverberate throughout the economy in the form of higher prices as subcontractors, agriculture, shipping, airline maintenance, subleases, cell phone roaming charges, and many other previously exempt steps in the production and shipping of good and the delivery of services.   Cutting the GE Tax exemptions is projected to vacuum $191M out of consumers’ pockets and into the General Fund for redistribution.

Here is the list from the text of the bill:

§237- Temporary suspension of exemption of certain amounts; levy of tax.

(a)  Notwithstanding any other law to the contrary, the exemption of the following amounts from taxation under this chapter shall be suspended from January 1, 2012, through June 30, 2015:

1. Amounts deducted from the gross income received by contractors as described under section 237-13(3)(B);
2. Reimbursements received by federal cost-plus contractors for the costs of purchased materials, plant, and equipment as described under section 237-13(3)(C);
3. Gross receipts of home service providers acting as service carriers providing mobile telecommunications services to other home service providers as described under section 237-13(6)(D);
4. Amounts deducted from the gross income of real property lessees because of receipt from sublessees as described under section 237-16.5;
5. The value or gross income received by nonprofit organizations from certain conventions, conferences, trade shows, or display spaces as described under section 237-16.8;
6. Amounts received by sugarcane producers as described under section 237-24(14);
7. Amounts received from the loading, transportation, and unloading of agricultural commodities shipped interisland as described under section 237-24.3(1);
8. Amounts received from the sale of intoxicating liquor, cigarettes and tobacco products, and agricultural, meat, or fish products to persons or common carriers engaged in interstate or foreign commerce as described under section 237-24.3(2);
9. Amounts received or accrued from the loading or unloading of cargo as described under section 237-24.3(4)(A);
10. Amounts received or accrued from tugboat and towage services as described under section 237-24.3(4)(B);
11. Amounts received or accrued from the transportation of pilots or government officials and other maritime-related services as described under section 237-24.3(4)(C);
12. Amounts received by labor organizations for real property leases as described under section 237-24.3(10);
13. Amounts received as rent for aircraft or aircraft engines used for interstate air transportation as described under section 237-24.3(12);
14. Amounts received by exchanges and exchange members as described under section 237-24.5;
15. Amounts received as high technology development grants under section 206M-15 as described under section 237-24.7(10);
16. Amounts received from the servicing and maintenance of aircraft or construction of aircraft service and maintenance facilities as described under section 237-24.9;
17. Amounts received by petroleum product refiners from other refiners for further refining of petroleum products as described under section 237-27;
18. Gross proceeds received from the construction, reconstruction, erection, operation, use, maintenance, or furnishing of air pollution control facilities, as described under section 237-27.5, that do not have valid certificates of exemption on January 1, 2012;
19. Gross proceeds received from shipbuilding and ship repairs as described under section 237-28.1;
20. Amounts received by telecommunications common carriers from call center operators for interstate or foreign telecommunications services as described under section 237-29.8;
21. Gross proceeds received by qualified businesses in enterprise zones, as described under section 209E-11, that do not have valid certificates of qualification from the department of business, economic development, and tourism on January 1, 2012; and
22. Gross proceeds received by contractors licensed under chapter 444 for construction within enterprise zones performed for qualified businesses within the enterprise zones or businesses approved by the department of business, economic development, and tourism to enroll into the enterprise zone program, as described under section 209E-11.

Voting No:

• David Ige
• Carol Fukunaga
• Sam Slom
• Suzanne Chun Oakland

Voting Yes:

• Donovan Dela Cruz
• Kalani English
• Gilbert Kahele
• Ronald Kouchi
• Pohai Ryan
• Jill Tokuda
• Donna Mercado Kim
• Glenn Wakai

Yes With reservations:

• Michelle Kidani
• Will Espero

Those highlighted in yellow have voted to increase the most regressive of all Hawaii taxes.  The hike in the GE Tax will hit low and middle income consumers hard.  Save this list for November 6, 2012.

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RELATED:

• HB793 Hikes GE Tax 25%, eliminates exemptions, Hearing Wednesday
• GE Tax Showdown in Senate—A vote to remember in November
• Abercrombie, Legislators scheme to divert capital improvement money to General Fund