Among the nearly two dozen GET exemptions Hawaii lawmakers could suspend to help balance the budget, ending one that benefits general contractors would generate the most revenue — more than $135 million over the next two years.

The Senate already advanced House Bill 793, which proposes temporarily halting 22 exemptions that benefit businesses including general contractors, sugarcane producers, petroleum refiners and tugboat operators. It would require them to pay the 4 percent general excise tax “on the previously exempt gross income or gross proceeds of sale derived from January 1, 2012, to June 30, 2015.” The bill is being vetted by a conference committee.

The measure could potentially bring in a total of $214 million in fiscal 2012 and another $220 million in 2013, according to estimates from the state Department of Taxation.

But the department says the revenue figure for 2012 could be closer to $173 million because eliminating the exemption for contractors might result in less subcontracting work. (Under the existing contracting exemption, a primary contractor can deduct amounts paid to subcontractors from gross receipts to calculate the amount subject to GET.)

Hawaii lawmakers are faced with a $1.3 billion budget shortfall over the next two years as they work to finalize a budget before an internal April 29 deadline.

Besides the subcontractor exemption, the following exemptions are expected to bring in the next biggest amounts:

  • Subleases: A deduction is allowed a taxpayer who leases real property from a lessor under a written lease, and subsequently subleases the same property to a sub-lessee under a written lease. $51.7 million in 2012 and $53.2 million in 2013.

  • Sales to the federal government: Exemptions of sales and gross proceeds of sales to the federal government, including the sale of liquor, tobacco and other products. $34.2 million in 2012 and $35.2 million in 2013.

  • Aircraft rentals: Exemption of gross receipts from rental or leasing of aircraft or aircraft engines used for interstate transportation of passengers and goods. $19.4 million in 2012 and $20 million in 2013.

Here’s a breakdown of all the proposed exemptions in HB 793 and how much the Tax Department estimates each could generate. When the Senate Ways and Means committee advanced the bill earlier this month, it removed previous language that additionally would have raised the GET rate by 1 percentage point. The move would have single-handedly generated an extra $388 million for fiscal 2012, and an additional $662 million in fiscal 2013.

Source: Hawaii Department of Taxation.

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