HI HB1960

Amends Hawaii's general excise tax (GET) law to exempt nonprofit organizations from GET on income from activities defined as "unrelated trade or business" under Section 513 of the Internal Revenue Code of 1986, as amended.

Replaces the current state standard of "primary purpose of which is to produce income" with the federal "unrelated trade or business" definition to align state and federal tax treatment of nonprofit income.

Specifies that Section 512(b) modifications to unrelated business taxable income under federal law shall not apply when determining whether an activity qualifies as an unrelated trade or business.

Clarifies that rental income generated by an unrelated trade or business continues to be subject to the general excise tax.

Effective date: January 1, 2050.