Hawaii – Nonprofit Tax Benefits and Personal Trust Liability Provisions Amended

SALT Report 2429 – The Hawaii State legislature amended certain provisions to expand the eligibility for general excise tax benefits to additional nonprofit organizations. The Bill also provides an exclusion from personal liability for certain nonprofit groups.

The definition of qualified “nonprofit organization” has been amended to include:

  • Fraternal benefit societies,
  • Religious, charitable, scientific, and educational organizations,
  • Business leagues
  • Chambers of commerce,
  • Boards of trade,
  • Civic leagues,
  • Agricultural and horticultural organizations,
  • Hospitals,
  • Infirmaries,
  • Sanitaria,
  • Agricultural cooperative associations, and
  • Other organizations that are currently exempt under H.R.S. Sec. 237-23(a)(3),(4),(5),(6), or (7)

Additionally, the Bill provides that the personal liability provisions do not apply to any officer, manager, or other person that has control or supervision over the gross proceeds or gross income collected to pay the general excise tax and is held in trust. This exclusion also applies to anyone who is charged with the responsibility of filing returns or paying the general excise tax on gross income or gross proceeds that is collected and held in trust for a nonprofit organization.

The provisions in this Bill are Effective July 1, 2013. However, it does not affect the rights and duties that matured, penalties that were incurred, or proceedings that were begun before July 1, 2013.

For Further Information

Hawaii State Legislature – Senate Bill 1185, Public Act 52, Laws 2013