HANO backs legislation to exempt all donations from GET

The Hawai‘i Alliance of Nonprofit Organizations supports SB873 which would make gifts and amounts that are deductible for income tax purposes exempt from Hawai‘i General Excise Tax.

Donors can deduct charitable contributions from their taxable income when filing their income tax, whether they donate directly or through a fundraiser. However, all fundraiser income is now subject to Hawai‘i GET, including both the donation portion and the value of the goods and service received by the donor through a fundraiser.

For example, if a nonprofit’s supporters buy tickets to a fundraising dinner for $100 apiece and receive meals and entertainment worth $40 each, they can deduct $60 – the contribution portion of the ticket price – from their personal income tax. The charity, however, must pay GET on the entire $100 received for each ticket.

Since fundraising is essential to provide the resources charitable organizations need to fulfill their missions to improve the quality of life in Hawaii, HANO supports exempting donations made through fundraising.