Bill > HB2134

This bill exempts income from real property leases from the state's general excise tax when the tenant, or "lessee," is a "small business." A small business is defined as one with $3 million or less in gross receipts in the previous year, employing 25 or fewer full-time equivalent employees in Hawaii, independently owned and operated, not controlled by a larger entity exceeding these thresholds, and not a franchisee of a brand with more than fifty global locations. This exemption aims to reduce operating costs for small businesses, which are crucial to Hawaii's economy but often struggle with the high cost of doing business, including rent. The bill also makes conforming amendments to existing laws to reflect this new exemption, ensuring that the general excise tax on leases does not apply in these specific cases and that penalties for non-compliance with rental collection reporting are also exempted when the lessee qualifies as a small business.