Bill > SB1278

This bill provides a tax exemption for grants received by eligible businesses through the federal Restaurant Revitalization Fund (RRF) under the American Rescue Plan Act of 2021. Specifically, the bill exempts these RRF grants from the state general excise tax (GET), which is Hawaii's primary business tax. The legislation stems from a finding that the Department of Taxation had previously announced that the RRF grants would be subject to GET, unlike similar COVID-19 relief programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan Emergency Advances (EIDL) Grants. The bill requires the Department of Taxation to refund any GET already paid on RRF grants and mandates that the department notify eligible businesses about their refund eligibility. Businesses must file their refund claims within six months of being notified. The bill is retroactive, applying to grants received since March 11, 2021, when the American Rescue Plan Act was enacted, and is technically set to take effect on July 1, 2050 (which appears to be a placeholder date). The purpose is to provide consistent tax treatment for different types of COVID-19 business relief programs, ensuring that restaurants and food service businesses do not face additional tax burdens during their pandemic recovery.

Budget and Finance, Business and Industry

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=1278&year=2026