HI SB554

Exempts gross proceeds from sales of produce by qualified small farmers from Hawaii's general excise tax for a maximum of five years.

Exemption applies only to produce intended for human consumption within Hawaii; sales outside the state are not exempt.

"Produce" is defined as fresh fruits or vegetables grown in soil or hydroponically, sold in the same condition as when harvested.

"Qualified small farmer" must cultivate land no larger than nine acres that has been fallow for at least five consecutive years and is classified as agricultural land by the state land use commission and county.

Exemption is effective for gross income received after December 31, 2017, and before January 1, 2023, when the provision automatically repeals.