H.B. 687 Summary

• Exempts food and food ingredients from Hawaii's general excise tax, with exceptions for alcoholic beverages, tobacco, soft drinks, dietary supplements, and prepared foods.

• Defines "prepared food" as food sold in a heated state, food sold with eating utensils provided by seller, or two or more food ingredients mixed/combined by seller; excludes bakery items, unheated foods sold by weight/volume, and raw animal foods requiring consumer cooking.

• Maintains general excise tax on meals served to certain vulnerable populations (seniors, disabled persons, homeless individuals, domestic violence shelter residents) except when prepared and served by specific nonprofit or state-contracted entities.

• Cites Hawaii's high cost of living and regressive tax burden on low-income families, noting a two-person household would save over $400 annually under the exemption; references 32 states plus D.C. already exempt groceries from sales taxes.

• Takes effect upon approval and applies to taxable years beginning after December 31, 2023.