THE SENATE
S.B. NO.
2399
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
relating to a general excise tax exemption for aircraft maintenance.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that many states, including Arizona, California, Colorado, Connecticut, Florida, Georgia, Iowa, Kansas, Massachusetts, Minnesota, New York, North Carolina, Ohio, Pennsylvania, Texas, and Wisconsin, explicitly exempt aircraft parts from their sales tax if sold to a federally licensed air carrier. In Hawaii, there is an exemption in the general excise tax law for aircraft servicing and maintenance. However, the Hawaii Intermediate Court of Appeals has recently decided that the exemption language does not exempt from the general excise tax the sale of parts to an aircraft carrier, even though the complementary use tax law explicitly exempts from the use tax imports of these parts from an out-of-state seller. To correct this imbalance, recognize the critical importance of the airline industry to the State, and ensure competitiveness with other states, including those listed above, in attracting and maintaining aircraft maintenance jobs and facilities, the purpose of this Act is to provide a general excise tax exemption for the sale of material, parts, or tools that are used for aircraft service and maintenance or for the construction of an aircraft service and maintenance facility.
SECTION 2. Section 237-24.9, Hawaii Revised Statutes, is amended by amending its title and subsection (a) to read as follows:
"§237-24.9 Aircraft service[Underlined: ,] [[Struck through: and]] maintenance facility[[Struck through: .]][Underlined: , and sale of related materials.] (a) This chapter shall not apply to amounts received from the servicing and maintenance of aircraft [[Struck through: or]][Underlined: ,] from the construction of an aircraft service and maintenance facility in the State[[Struck through: .]][Underlined: , or from the sale of material, parts, or tools to a licensed aircraft carrier if they are purchased for aircraft service and maintenance or for the construction of an aircraft service and maintenance facility.]"[Underlined: ]
SECTION 3. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 4. This Act shall take effect on July 1, 2026.
INTRODUCED BY:
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Report Title:
Taxation; General Excise Tax; Aircraft Service and Maintenance
Description:
Provides a general excise tax exemption for the sale of material, parts, or tools used for aircraft service and maintenance or for the construction of an aircraft service and maintenance facility.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.