HB522 would create a recurring general excise tax (GET) holiday for qualifying small businesses in Hawaii. Under the bill, GET would not be due on gross proceeds of sales or gross income earned by a small business on the first Saturday of each month, from 12:01 a.m. through 12:00 midnight, so long as the tax savings are passed on to the purchaser. The exemption would not apply to goods purchased for resale, and it would exclude certain transactions such as rebates, layaway sales, rain checks, exchanges outside the holiday period, and items bought through the internet, telephone, or mail-order.
The bill defines a “small business” as a for-profit entity domiciled and authorized to do business in Hawaii, independently owned and operated, and employing fewer than 50 employees in Hawaii. It also relieves taxpayers from needing any special license or permit during the holiday, while requiring records that identify the goods or services sold, the sale date, and the price. The measure would apply to taxable years beginning after December 31, 2025, and would amend chapter 237, Hawaii Revised Statutes, by adding a new section establishing this monthly tax holiday.
Impact
HB522 would amend Hawaii’s general excise tax law by adding a new statutory exemption for qualifying small businesses on one day each month. The practical effect would be to reduce GET collections from eligible sales on the first Saturday of every month and to create new compliance rules for businesses that must document qualifying sales and pass the savings through to customers. The bill would affect small, Hawaii-based businesses with fewer than 50 employees, while leaving larger businesses and excluded transaction types subject to the existing tax rules.
Sentiment
The available context suggests generally favorable treatment of the bill, or at least no recorded opposition in the materials provided. The measure is framed as part of a “Small Business Caucus Package,” indicating support for small-business relief and tax reduction. No committee transcripts or vote records were provided, so there is no documented debate or recorded split in sentiment in the available history.
Contention
The main policy issues raised by the bill’s text are administrative and fiscal rather than ideological. Potential points of contention include the loss of GET revenue to the state, the fairness of limiting the benefit to businesses with fewer than 50 employees, and the complexity of enforcing the requirement that savings be passed on to purchasers. The bill also excludes online, telephone, and mail-order purchases, which could be seen as limiting the benefit for businesses that rely on remote sales or as creating uneven treatment across sales channels.