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Hawaii: State tax guidance for agricultural and farmers cooperatives

Hawaii: Guidance, agricultural and farmers cooperatives

The Department of Taxation released a revised discussion providing general information about the application of the general excise, use, and income taxes on agricultural cooperatives organized under Chapter 421, Hawaii Revised Statutes (HRS), and farmer’s cooperatives organized under Internal Revenue Code section 521.

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The discussion [PDF 330 KB] (Tax Facts 2017-1 as revised in February 2019) defines what is an agricultural cooperative and what is a farmer’s cooperative, discusses the benefits available and whether services may be provided to non-members, how to form a cooperative, and other measures.

The discussion notes that cooperative associations organized under Chapter 421, HRS, and farmers’ cooperatives organized under IRC section 521 are exempt from Hawaii’s general excise and income tax, provided they meet the requirements of section 421-23, HRS. (Farmers’ cooperatives organized under IRC section 521, need not be organized in Hawaii.) It further notes that sales of agricultural supplies to cooperatives are taxed similar to sales made directly to agricultural or aquacultural producers.

 

For more information, contact KPMG’s National Director of Cooperative Tax Services:

David Antoni | +1 (267) 256-1627 | dantoni@kpmg.com


Or Associate National Director of KPMG’s Cooperative Tax Services:

Brett Huston | +1 (916) 554-1654 | bhuston@kpmg.com

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