HB937 would exempt grants received by eligible businesses from the federal Restaurant Revitalization Fund (RRF) from Hawaii’s general excise tax (GET). The bill is framed as a COVID-19 relief measure, tying the RRF to earlier federal assistance programs such as the Paycheck Protection Program and EIDL grants, which the Department of Taxation had already treated as not subject to GET. It states that the purpose is to align the tax treatment of RRF grants with those earlier relief programs under the same pandemic-response rationale.
The bill also requires that any state GET already paid on RRF grants be refunded to the taxpayer, though the refund deadline is left blank in the text. It applies retroactively to taxable years beginning after March 11, 2021, which would reach back to the effective date of the American Rescue Plan Act and potentially affect prior tax filings and payments related to RRF grants.
Impact
If enacted, HB937 would amend the practical application of chapter 237, Hawaii Revised Statutes, by excluding RRF grants from the general excise tax base for eligible businesses. It would also create a refund obligation for taxes already collected on those grants, potentially requiring the Department of Taxation to process amended returns or refunds for affected taxpayers. The bill would primarily affect food and beverage businesses that received RRF assistance and could reduce state tax revenue associated with those grants.
Sentiment
The bill text reflects a supportive, remedial approach toward pandemic relief recipients, emphasizing fairness and consistency with prior tax treatment of PPP and EIDL assistance. No committee transcripts or recorded votes were provided, so there is no direct evidence of legislative debate, opposition, or formal support beyond the bill’s stated findings and purpose. Based on the text alone, the measure appears intended to correct what its sponsors view as an inconsistency in tax policy.
Contention
The main point of contention is likely whether RRF grants should receive the same GET exemption as PPP and EIDL relief. Supporters would argue that the grants served a similar pandemic-relief purpose and should not be taxed, while opponents may raise concerns about retroactive tax relief, administrative burden, and lost state revenue. The bill also leaves the refund deadline blank, suggesting unresolved implementation details that could become a practical issue for the Department of Taxation and affected taxpayers.
A resolution to direct the Clerk of the House of Representatives to only present to the Governor enrolled House bills finally passed by both houses of the One Hundred Third Legislature.
Relating to nonsubstantive additions to, revisions of, and corrections in enacted codes, to the nonsubstantive codification or disposition of various laws omitted from enacted codes, and to conforming codifications enacted by the 88th Legislature to other Acts of that legislature.