HI SB3095

Exempts sales of services and tangible personal property sold to the federal government by Hawaii-based businesses from the general excise tax, while maintaining the existing exemption for goods alone.

Addresses competitive disadvantage faced by Hawaii businesses in federal contracting, where approximately $900,000,000 of $2,000,000,000 in annual federal contracts are set aside for small businesses.

Hawaii businesses currently must include the 4.712 percent general excise tax (in Honolulu) in federal bids while out-of-state competitors do not, placing in-state contractors at a disadvantage under federal "lowest price technically accepted" bidding standards.

Hawaii is one of only three states (along with Washington and Vermont) that applies general excise tax to sales of goods and services to the federal government.

Effective for taxable years beginning after December 31, 2015.