Hawaii – Reporting of Exemptions

SALT Report 1203 РThe Hawaii Department of Taxation updated their guidance regarding general excise and use tax exemptions under Act 105 (S.B. 754), Laws 2011, which temporarily suspends certain tax exemptions from July 1, 2011 through June 30, 2013.  For taxpayers involved in the following activities and split their commissions or gross proceeds with others are subject to tax only on the portion retained by that taxpayer.

Those activities include:

  • Operating coin-operated devices;
  • Producing an event or spectacle and/or promoting a staged event;
  • Selling insurance or real estate;
  • Selling tour packages; or
  • Furnishing transportation of passengers or property through arrangements between motor carriers
Although not required, some taxpayers have chosen to file returns reporting their nontaxable commissions or proceeds as gross income and the amount paid to the other party as an exemption or deduction. These taxpayers are not required to file Schedule GE-1, issued by the department for reporting exemptions as required under Act 105, because the statute authorizing the taxation of only the commissions or proceeds retained by the taxpayer provides for the division of income, not an exemption or deduction.