Bill > SB1278

This bill addresses tax treatment of federal COVID-19 relief grants for restaurants, specifically the Restaurant Revitalization Fund (RRF) established under the American Rescue Plan Act of 2021. The bill exempts RRF grants from the state general excise tax (GET), which is Hawaii's broad-based business tax similar to a sales tax, and requires the Department of Taxation to notify eligible businesses about their ability to receive refunds for any GET previously paid on these grants. The legislation stems from a discrepancy in tax treatment, where previous COVID-19 relief programs like the Paycheck Protection Program (PPP) and Economic Injury Disaster Loan (EIDL) were already exempt from GET, but the Department of Taxation initially did not extend the same tax exemption to RRF grants. The bill mandates that the Department of Taxation must notify eligible businesses of their refund eligibility and that businesses must file refund claims within six months of receiving such notification. By applying retroactively to March 11, 2021 (the effective date of the American Rescue Plan Act), the bill ensures that restaurants that received RRF grants can benefit from this tax exemption, providing financial relief to businesses that were significantly impacted by the COVID-19 pandemic.

Budget and Finance, Business and Industry

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=1278&year=2025