SB1124 establishes a new “retail delivery safety fee” on retail deliveries of taxable goods and clothing into Hawaii, with the stated goal of addressing safety risks created by increased delivery traffic in residential neighborhoods. The bill finds that more large trucks are entering neighborhoods where children and families walk, bike, and travel to school, and it ties the fee to funding safety improvements through the Safe Routes to School Program Special Fund. The fee is imposed on retailers for each qualifying delivery transaction, and retailers may pass it on to purchasers if separately stated on the invoice.
The bill defines “retail delivery” broadly to cover deliveries of tangible personal property subject to the general excise tax and clothing, but excludes pickup and curbside pickup. It also creates exemptions for deliveries of food and food ingredients, prepared food, food and beverage service establishments, and drugs and medical devices. The measure requires retailers to report and remit the fee using the same administrative framework used for chapter 237 taxes, and it allows marketplace facilitators and third-party tax collectors to participate in collection and remittance. The proceeds, after administrative costs, are deposited into the Safe Routes to School Program Special Fund.
In terms of state law, SB1124 adds a new chapter to title 14 of the Hawaii Revised Statutes and amends section 291C-4 to include retail delivery safety fee revenue as a source for the Safe Routes to School Program Special Fund. It also incorporates chapter 237’s audit, assessment, refund, penalty, interest, enforcement, collection, and appeal procedures for administration of the new fee. The report title indicates the fee amount is 50 cents per qualifying transaction, though the bill text itself leaves the amount blank in the draft language shown.
The general sentiment reflected in the available history is supportive, at least at the committee stage: the Senate Transportation and Culture and the Arts Committee passed the bill with amendments by a 4-0 vote. No committee transcript excerpts are provided, so there is no recorded floor discussion here, but the bill’s framing suggests a public-safety and school-safety rationale that likely helped drive support.
The main points of contention are likely to be the new cost imposed on retailers and potentially consumers, the breadth of the delivery definition, and whether the fee should apply to ordinary e-commerce deliveries at all. The exemptions for food, prepared food, and medical items suggest an effort to narrow the burden and avoid taxing essential purchases, but the bill still raises questions about administrative complexity, pass-through pricing, and whether a delivery fee is the best mechanism for funding school-route safety improvements.
SB1124 would create a new retail delivery safety fee regime in Hawaii law, administered by the Department of Taxation, and would direct net proceeds to the Safe Routes to School Program Special Fund. It would also amend the fund statute to expressly include these fee revenues. Retailers, including marketplace facilitators and out-of-state sellers making deliveries into Hawaii, would be responsible for reporting and remitting the fee, with chapter 237 tax procedures largely governing administration and enforcement.
The available voting history shows clear committee support, with the Senate Transportation and Culture and the Arts Committee advancing the bill 4-0 with amendments. The bill’s stated purpose—improving neighborhood and school-route safety—likely contributes to a favorable policy framing. No opposing testimony or transcript excerpts are provided, so the record here shows support but not detailed debate.
Likely areas of disagreement include whether it is appropriate to impose a per-delivery fee on retailers or consumers, whether the fee will be passed through to shoppers as an added charge, and whether the measure unfairly burdens e-commerce and delivery-heavy businesses. There may also be concern about administrative burden for retailers and the Department of Taxation, as well as whether the exemptions for food and medical deliveries are sufficient or create uneven treatment among different types of purchases.