SALT Report 1594 – The Hawaii State Legislature recently passed legislation that provides a general excise tax exemption for privately-owned nonprofit public water companies that supply potable water to residential communities that do not have access to public water systems.
Although these privately owned companies are tax-exempt under section 501(c) (12), they are still subject to the state income and general excise taxes. Therefore, the Hawaii legislature ruled that nonprofit companies who operate exclusively to supply potable water to communities that lack public utility water services should receive the same tax exempt status as water companies owned by a county or municipality.
The new exemptions will apply to taxable years beginning after December 31, 2011.
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