HI SB2599

Increases the general excise tax rate from 4% to 5% on most business activities, including sales of tangible personal property, contracting, amusements, services, and other business activities

Increases the use tax rate from 4% to 5% on imported tangible personal property and imported services or contracting for use in Hawaii

Requires 20% of all general excise tax and use tax revenues (after specified deductions) be deposited into a special account in the general fund beginning January 1, 2017, dedicated to department of education operations including salaries and maintenance costs

Tax increases are intended to fund department of education needs including facility repair and maintenance backlogs, air conditioning in classrooms, and expansion of the public prekindergarten program

Effective upon approval, with tax rate changes applying to taxable years beginning after December 31, 2016