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-THE SENATE A— AI 1278THIRTY-THIRD LEGISLATURE, 2025 D 5 NC S.D. 1
-STATE OF HAWAII ' H.D. 1
+THE SENATE
+
+S.B. NO.
+
+1278
+
+THIRTY-THIRD LEGISLATURE, 2025
+
+S.D. 1
+
+STATE OF HAWAII
+
 A BILL FOR AN ACT
+
 RELATING TO THE GENERAL EXCISE TAX.
+
 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
-SECTION 1. The legislature finds that the federal
-government established various relief programs to provide
-critical assistance to millions of individuals, families, and
-businesses during the COVID-19 pandemic and the nation's
-recovery therefrom, pursuant to the Coronavirus Aid, Relief, and
-Economic Security Act (CARES Act) effective March 27, 2020, and
-the American Rescue Plan Act of 2021 (ARPA), effective
-March 11, 2021.
-The legislature further finds that the CARES Act created
-the Paycheck Protection Program (PPP), which provided a
-forgivable loan to small businesses, and the Economic Injury
-Disaster Loan Emergency Advances Grant (EIDL), which provided
-loan advances that do not need to be repaid, to small
-businesses. Likewise, ARPA created the Restaurant
-Revitalization Fund (RRF) to provide grants to food and beverage
-businesses that experienced revenue loss related to the COVID-19
-pandemic.
-2025-2582 SB1278 HDI HMSO 1
 
-Page 2
-S.B. NO
-1278
-S.D. 1
-H.D. 1
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-The legislature also finds that on May 4, 2020, the
-department of taxation issued Tax Information Release
-No. 2020-02 (Revised), providing guidance on the State's tax
-treatment of various COVID-19 relief programs and payments under
-the CARES Act, which specified that in light of the severity of
-the economic impact of the COVID-19 pandemic, state general
-excise tax will not be imposed on the loan amounts forgiven
-under PPP and EIDL.
-The legislature additionally finds that in 2024, the
-department of taxation announced that the general excise tax
-exemption applicable to the forgiven PPP and EIDL loans and loan
-advances under the CARES Act does not apply to the RRF grants
-under ARPA, despite the purpose of RRF grants aligning with the
-rationale behind PPP and EIDL.
-Accordingly, the purpose of this Act is to:
-(1) Exempt Restaurant Revitalization Fund grants received
-by eligible businesses pursuant to the American Rescue
-Plan Act of 2021 from the state general excise tax;
-(2) Require the department of taxation to notify all
-taxpayers eligible for refunds of any state general
-excise tax paid for Restaurant Revitalization Fund
-2025-2582 SB1278 HDI HMSO 2
+���� SECTION 1.� The
+legislature finds that the federal government established various relief
+programs to provide critical assistance to millions of individuals,
+families, and businesses, during the COVID-19 pandemic and the
+nation's recovery therefrom, pursuant to the Coronavirus Aid, Relief, and
+Economic Security Act (CARES Act) effective March 27, 2020, and the American
+Rescue Plan Act of 2021 (ARPA), effective March 11, 2021.
 
-Page 3
-S.B. NO. -8iH.D. 1
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-grants of their eligibility and require taxpayers to
-file refund claims no later than six months following
-notification; and
-(3) Require any state general excise taxes paid by
-eligible businesses for Restaurant Revitalization Fund
-grants to be refunded to the taxpayer.
-SECTION 2. (a) Any grants received from the federal
-Restaurant Revitalization Fund by an eligible business pursuant
-to the American Rescue Plan Act of 2021 shall not be subject to
-general excise taxation under chapter 237, Hawaii Revised
-Statutes.
-(b) The department of taxation shall notify all taxpayers
-eligible for refunds of any state general excise tax paid for
-grants received from the federal Restaurant Revitalization Fund
-of their eligibility. Taxpayers shall file refund claims no
-later than six months following the department of taxation's
-notice of eligibility.
-(c) Any state general excise tax paid by eligible
-businesses for grants received from the federal Restaurant
-Revitalization Fund shall be refunded to the taxpayer no later
-than
-2025-2582 SB1278 HDI HMSO 3
+���� The
+legislature further finds that the CARES Act created
+the Paycheck Protection Program (PPP), which provided a forgivable loan to
+small businesses, and the Economic Injury Disaster Loan Emergency Advances
+(EIDL) Grant, which provided loan advances that do not need to be repaid, to
+small businesses.� Likewise, ARPA created
+the Restaurant Revitalization Fund (RRF) to provide grants to food and beverage
+businesses that experienced revenue loss related to the COVID-19 pandemic.
 
-Page 4
-S.B. NO. H.D. 1
-1 SECTION 3. This Act shall take effect on July 1, 3000, and
-2 shall apply retroactively to March 11, 2021.
-2025-2582 SB1278 HD1 HMSO 4
+���� The
+legislature also finds that on May 4, 2020, the department of taxation issued
+Tax Information Release No. 2020‑02 (Revised), providing guidance on
+the State's tax treatment of various COVID-19 relief programs and payments
+under the CARES Act, which specified that in light of the severity of the
+economic impact of the COVID-19 pandemic, state general excise tax will not be
+imposed on the loan amounts forgiven under PPP and EIDL Grants.
 
-S.B. NO. 3-H.D. 1
+���� The
+legislature additionally finds that in 2024, the department of taxation
+announced that the general excise tax exemption applicable to the forgiven PPP
+loans and EIDL Grants under the CARES Act does not apply to the RRF grants
+under ARPA, despite the purpose of RRF grants aligning with the rationale
+behind the PPP and EIDL Grants.
+
+���� Accordingly,
+the purpose of this Act is to exempt Restaurant Revitalization Fund grants
+received by eligible businesses pursuant to the American Rescue Plan Act of
+2021 from the state general excise tax.
+
+���� SECTION
+2.� (a)�
+Any grants received from the federal Restaurant Revitalization Fund by
+an eligible business pursuant to the American Rescue Plan Act of 2021 shall not
+be subject to general excise taxation under chapter 237, Hawaii Revised Statutes.
+
+���� (b)� Any
+state general excise tax paid by eligible businesses for grants received from
+the federal Restaurant Revitalization Fund shall be refunded to the tax payer,
+no later than           .
+
+���� SECTION 3.� This Act shall take effect on July
+1, 2050, and shall apply retroactively to March 11, 2021.
+
 Report Title:
-General Excise Tax; Exemption; American Rescue Plan Act of 2021;
-Restaurant Revitalization Fund; Department of Taxation;
-Notification; Refund
+
+General
+Excise Tax; Exemption;
+COVID-19; Relief Funds; American
+Rescue Plan Act of 2021; Restaurant Revitalization Fund; Refund
+
 Description:
-Exempts from the state general excise tax any grants received
-from the federal Restaurant Revitalization Fund by an eligible
-business pursuant to the American Rescue Plan Act of 2021.
-Requires the Department of Taxation to notify all taxpayers
-eligible for refunds of any state general excise tax paid for
-grants received from the federal Restaurant Revitalization Fund
-of their eligibility and requires taxpayers to file refund
-claims no later than six months following notification.
-Requires any state general excise taxes paid by eligible
-businesses for Restaurant Revitalization Fund grants to be
-refunded to the taxpayer. Effective 7/1/3000. Applies
-retroactively to 3/11/2021. (HDI)
-The summary description of legislation appearing on this page is for informational purposes only and is
+
+Exempts from the state general excise tax any
+grants received from the federal Restaurant Revitalization Fund by an eligible
+business pursuant to the American Rescue Plan Act of 2021.� Requires any state general excise taxes paid by eligible businesses for Restaurant
+Revitalization Fund grants to be refunded to the taxpayer.�
+Effective 7/1/2050.� Applies retroactively
+to 3/11/2021.� (SD1)
+
+The summary description
+of legislation appearing on this page is for informational purposes only and is
 not legislation or evidence of legislative intent.
-2025-2582 SB1278 HDI HMSO