HI HB964

Amends Hawaii's general excise tax law to align the exemption for scientific contracts with the United States with parameters established by Section 41 of the Internal Revenue Code.

Current exemption was designed to allow local contractors to compete with out-of-state entities for scientific contracts with federal facilities.

Department of Taxation reported that the exemption creates significant administrative burden, with 10% of the Department's audit staff dedicated to evaluating exemption claims.

Proposed changes to the exemption would improve administrative efficiency for the Department of Taxation.

Committee on Finance recommends passage; Department of Taxation testified in support while Pukoa Scientific opposed the measure.