Hawaii Counties May Levy Surcharge Tax

Passed into law on July 13, 2005, Act 247 allows Hawaii counties to levy a local surcharge on excise and use tax of up to one-half percent of all gross proceeds and income beginning January 1, 2007. The surcharge does not apply to charges currently taxable at one-half or 0.15 percent rates, nor the surcharge apply to items that are exempt from state level excise and use tax. Any contract entered into after June 30, 2006 is subject to the surcharge, however if a contract was entered into before June 30, 2006 and the contract does not provide for the pass-through of a tax increase, the surcharge does not apply. (Act 247, Session Laws of Hawaii 2005, Effective June 13, 2005)

Posted on February 22, 2007