Step-By-Step Instructions For Filling In Your Form G-45 (Periodic Return) (Page 7 of 11) in pdf

SCHEDULE OF GENERAL EXCISE TAX EXEMPTIONS AND DEDUCTIONS

(NOTE: ALL SECTION REFERENCES ARE TO THE HAWAII REVISED STATUTES)

Unless the following instructions tell you not to

2013 for the exemption on the amounts received

(Section 209E-11.)

There is a temporary

suspension for the period from July 1, 2011

from the servicing and maintenance of certain

report the exempted/deducted amounts, you

aircrafts or from the construction of a qualified

through June 30, 2013 for the exemption on

must explain on Schedule GE (Form G-45/G-49)

aircraft service and maintenance facility. The

the gross income received by a contractor for

under the “Activities Under Chapter 237, HRS”

construction within an enterprise zone performed

suspension means that the transactions will no

section, the exemptions/deductions you are

longer be exempt from the GET. This temporary

for a qualified business within the enterprise zone.

claiming on Form G-45 and Form G-49. For

suspension does not apply to gross income from

The suspension means that the transactions

circumstances under which an exemption or a

will no longer be exempt from the GET. This

binding written contracts entered into prior to

deduction is permitted or allowed, refer to the

July 1, 2011, that do not permit the passing on of

temporary suspension does not apply to gross

following sections:

increased rates of taxes.

income from binding written contracts entered

into prior to July 1, 2011, that do not permit the

An asterisk (*) next to the exemption/de-

Alimony: Alimony and other similar payments

passing on of increased rates of taxes.

duction indicates that the reporting re-

and settlements are exempt. Do not report these

quirements have changed due to Act 105,

Damages for Personal Injuries and Property

amounts. (Section 237-24(7).)

SLH 2011 or other tax law changes.

For

Damage: Compensatory damages for personal

Bad Debts: For accrual basis taxpayers, ac-

more information, see Department of Taxa-

injuries or defamation, or compensatory dam-

counts that are actually charged off as worth-

tion Announcement Nos. 2011-09, 2011-

ages for damage to property, are exempt. Do

less for income tax purposes may be de-

10, 2011-22, and 2011-26 and TIR Nos.

not report these amounts. (Section 237-24(5).)

ducted in Column b. Report and explain these

2011-01, 2011-02, 2011-03 and 2011-04.

Punitive damages, and any damages for breach

amounts.

No deduction may be taken for a

of contract, are taxable if the damages are con-

Affordable Housing: Gross income received

bad debt reserve. If accounts written off are

nected to business in which you are or were

by a qualified person or firm for the planning,

later collected, the collection is included in

engaged.

design, financing, construction, sale, rental, or

Column a for the period in which it was received.

lease of a housing project certified under section

Diplomats and Consular Officials, Sales to:

(Section 237-3(b).)

Amounts received from foreign diplomats and

46-15.1 or 201H-36 by a qualified state agency

Casual Sales: Proceeds from a casual sale are

consular officials who are holding cards issued

or a county is exempt. Report and explain these

not taxed. A casual sale means an occasional,

by the U.S. Department of State granting them an

amounts. For more information, see Form G-37

isolated, irregular, infrequent, or incidental sale or

exemption from state taxes are exempt. Report

or contact the Hawaii Housing Finance and

transaction involving tangible personal property

and explain these amounts.

(Section 237-

Development Corporation at 808-587-0597.

that is not ordinarily sold in the usual course of

24.3(11).) The tax exemption, however, is not ap-

(Sections 46-15.1, 201H-36, and 237-29.)

a trade or business. Sales of inventory, or sales

plicable to taxes imposed on telecommunication

that are carried out on a systematic basis, such

Air Pollution Control Facility*: Gross proceeds

services, other utilities, or gasoline purchases.

as when a rental car company sells its rental cars

from and the tangible personal property furnished

See Department of Taxation Announcement Nos.

in order to make way for new ones to rent, do not

in conjunction with the construction, reconstruc-

2000-07 and 2011-25 for more information.

qualify as casual sales. For details, see section

tion, erection, operation, use, or maintenance of

Disability Provisions*:

18-237-1, Hawaii Administrative Rules. Do not

The first $2,000 of

an air pollution control facility (APCF) are exempt.

report these amounts. (Section 237-2.)

gross income earned by any blind, deaf, or totally

The APCF must be certified by the Department

disabled person is exempt. Report and explain

of Health (DOH) at least once every five years

Certain Convention, Conference, and Trade

these amounts. (Section 237-24(13).) For more

and file this certification with the Department

Show Fees*: All of the value or gross income

information, see TIR Nos. 89-3 and 94-2, and

of Taxation (DoTax). An exemption may not be

derived by a fraternal benefit, religious, chari-

Department of Taxation Announcement 2002-6.

claimed if the APCF does not have a valid certifi-

table, scientific, educational, or other nonprofit

cate from the DOH on file with the DoTax. Report

Discounts and Returned Merchandise: Cash

organization under section 501(c) of the Internal

and explain these amounts. (Section 237-27.5.)

Revenue Code from fees for convention, confer-

or other discounts on the price of articles sold

Act 105 temporarily suspends this exemption for

ence, or trade show exhibit or display spaces

are considered price adjustments and should

the period from July 1, 2011 through June 30,

is exempt. Report and explain these amounts.

be considered in figuring the amount to report in

2013 unless the APCF is certified by the DOH

(Section 237-16.8.) There is a temporary sus-

Column a. Do not report these amounts. Cash or

before July 1, 2011. Therefore, the suspension

pension for the period from July 1, 2011 through

store credit that is given for returned merchandise

applies to any new APCF certified by the DOH on

June 30, 2013 for the exemption on the gross

is deductible and should be entered in Column

or after July 1, 2011 or any existing APCF that did

income received by a fraternal benefit, religious,

b of the same line on which the merchandise

not have a valid certificate from the DOH on file

charitable, scientific, educational, or other non-

sales were reported. Report and explain these

with DoTax before July 1, 2011. This temporary

profit organization under section 501(c) of the

amounts. (Section 237-3(b).)

suspension does not apply to gross income from

Internal Revenue Code from fees for conven-

binding written contracts entered into prior to July

Dividends and Distributions:

Dividends

tion, conference, or trade show exhibit or display

1, 2011, that do not permit the passing on of in-

and other distributions of income or profit from

spaces. The suspension means that the transac-

creased rates of taxes.

corporations, partnerships, and trusts are not

tions will no longer be exempt from the GET. This

taxable. Do not report these amounts. (Section

temporary suspension does not apply to gross

Aircraft Leasing*: Amounts received as rent

237-3(b).) The exemption does not apply if the

income from binding written contracts entered

for the rental or leasing of aircraft or aircraft

distribution is a payment due to transaction of

into prior to July 1, 2011, that do not permit the

engines that is used by the lessee for interstate

business with the shareholder, partner, member,

passing on of increased rates of taxes. See TIR

air transportation of passengers and goods are

or beneficiary.

No. 2011-01 for more information.

exempt.

Report and explain these amounts.

(Section 237-24.3(12).) There is a temporary

Drugs and Prosthetic Devices:

Sales to

Common Paymaster Exception: If employees

suspension for the period from July 1, 2011

individuals by a hospital, infirmary, medical clinic,

work for more than one related corporation, one

through June 30, 2013 for the exemption on the

health care facility, pharmacy, or practitioner

of the corporations may pay the employees on

amounts received as rent for the rental or leasing

licensed to administer drugs or prosthetic devices

behalf of all employers. If so, the intercompany

of aircraft or aircraft engines for interstate air

are exempt. Report and explain these amounts.

transfers of funds to the common paymaster are

transportation. The suspension means that the

(Section 237-24.3(7).) Prosthetic devices do not

exempt.

Report and explain these amounts.

transactions will no longer be exempt from the

include such items as glasses, hearing aids, or

(Section 237-23.5(b).) See also the exemptions

GET. This temporary suspension does not apply

dentures. For more information, see TIR No. 86-4.

for hotel operators, hotel suboperators, and

to gross income from binding written contracts

orchard operators on the following page.

entered into prior to July 1, 2011, that do not

Employee Benefit Plans: Amounts received by

permit the passing on of increased rates of taxes.

an employee benefit plan such as contributions,

Contracting Activity in an Enterprise Zone*:

dividends, and interest are exempt and do

Gross proceeds received by a contractor for

Aircraft Service and Maintenance Facility*:

not need to be reported.

Amounts received

construction within an enterprise zone performed

Amounts received from the servicing and

by a nonprofit organization or office such as

for a qualified business within an enterprise

maintenance of certain types of aircraft or from

payments for costs and expenses incurred for the

zone are exempt.

Report and explain these

the construction of a qualified aircraft service

administration of an employee benefit plan are

amounts. The designation of enterprise zones

and maintenance facility in the State are exempt.

also exempt; however, these amounts must be

and the certification of qualified businesses are

Report and explain these amounts.

(Section

reported and explained. (Section 237-24.3(5).)

administered by the Department of Business,

237-24.9.) There is a temporary suspension for

Economic Development, and Tourism (DBEDT).

the period from July 1, 2011 through June 30,

Page 7

Step-By-Step Instructions For Filling In Your Form G-45 (Periodic Return) Page 7

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