SB681 amends Hawaii’s enterprise zone general excise tax exemption statute to remove a specific carve-out for agricultural businesses engaged in the production of genetically engineered agricultural products. Under current law, qualified businesses in enterprise zones can receive a general excise tax exemption on gross proceeds from eligible business activity, and agricultural businesses are generally included except for those producing genetically engineered agricultural products. This bill strikes that exception, meaning those agricultural businesses would no longer be excluded from the exemption solely because they produce genetically engineered agricultural products.
The bill also preserves the existing structure of the enterprise zone tax exemption, including annual certification by the department, the exemption for certain contractor construction gross proceeds within an enterprise zone, and the time limits of up to seven years for most qualified businesses and up to ten years for manufacturing or agricultural processing businesses. It retains the tolling provision for force majeure events. The measure takes effect upon approval.
Impact
SB681 would amend section 209E-11 of the Hawaii Revised Statutes by deleting language that disqualifies agricultural businesses engaged in genetically engineered agricultural production from the general excise tax exemption on agricultural retail sales. As a result, such businesses could become eligible for the enterprise zone-related general excise tax exemption if they otherwise meet the chapter’s requirements. The bill does not change the broader enterprise zone framework, but it narrows the list of agricultural businesses excluded from tax relief and could affect the Department of Taxation, the Department certifying qualified businesses, and agricultural operators in enterprise zones.
Sentiment
The available vote history suggests the bill has received some support but not unanimous backing. It passed the Senate Agriculture and Environment Committee 3-1, indicating a favorable committee recommendation with at least one dissenting vote. The bill was then reported and advanced to the Ways and Means Committee, which suggests it remained viable and was moving through the normal fiscal review process. No committee transcript was provided, so broader public or member arguments are not available from the record here.
Contention
The main point of contention is the removal of the exemption restriction for genetically engineered agricultural products. Supporters likely view the bill as expanding tax relief and treating agricultural businesses more uniformly within enterprise zones, while opponents may object to extending tax benefits to genetically engineered agricultural production. The split committee vote indicates disagreement over that policy choice, particularly around whether such businesses should receive the same general excise tax exemption as other agricultural operators.