Tax exemptions worth an estimated $56 million would be chopped if the Legislature adopts a plan already approved by the state House.

The House has also approved a bill to cut another $56 million in exemptions given to health maintenance organizations such as HMSA and Kaiser Permanente.

The list of opponents to the bills reads like a who's who of Hawaii business, but the measures have the strong backing of both House Speaker Calvin Say and Finance Chairman Marcus Oshiro.

“;These people have had exemptions for 30 or 40 years,”; said Oshiro (D, Wahiawa-Poamoho). “;The taxes they don't pay is paid by someone else. ... Every man, woman and child that makes a purchase has been subsidizing these folks.”;

The bills passed the House last week and are now under consideration in the Senate.

The exemption bill, House Bill 2877, would require most businesses now exempt from general excise taxes to pay 0.5 percent on transactions. Some businesses would pay 1 percent.

Last week, Lowell Kalapa, executive director and president of the independent Tax Foundation of Hawaii, said the bill would drive up business costs.

“;What is scary is that while one-half percent doesn't sound like much, if the bill goes into conference, they could decide to raise that to 2 percent or more, and that could be a lot,”; Kalapa said.

The state's two medical insurance firms warned that they would pass any tax increase on to their customers.

“;HB 2852 would require health plans to pay a premium tax of 4.265 percent, which would essentially be passed on to Hawaii's businesses,”; said Jennifer Diesman, HMSA vice president for government relations.

And Kaiser Vice President Frank Richardson told lawmakers that “;the burden of an excise tax such as this one would be passed on to health plan purchasers and consumers.”;

Some of the business activities among the 50 that would lose their exemptions until 2015 include the Continental aircraft maintenance building, scientific contracts funded with federal grants, call centers, ship repair and maintenance facilities, and fees paid to the convention center.

Legislators explained that the purpose of the bills is to “;address the current fiscal crisis facing the state by temporarily suspending”; the GET (general excise tax) exemption for certain people and businesses.

But other business groups were so concerned they said enactment of the exemption repeal would drive them out of business.

For instance, the Retail Merchants of Hawaii is a not-for-profit trade organization that is exempt from paying the GET, but the exemption bill would force it to pay a 0.5 percent tax on its business transactions.

“;It would be yet another burden on the organization. It is regrettable that Retail Merchants of Hawaii, founded in 1901, might not survive another,”; said Carol Pregill, president of Retail Merchants.

But Oshiro argued that the Legislature is faced with raising some taxes or raising all taxes.

“;Do you do it to those who have received special treatment at the expense of all taxpayers, or do you generate the necessary revenues through raising the GET on all taxpayers?”; Oshiro asked.

Kalapa contends that if the business community were relieved that the Legislature has so far rejected a GET increase, there is still a chance of other economic bad news.

“;Hold on to your wallet, because they are going to take it out of your hide,”; Kalapa warned.

The Lingle administration opposed both bills, saying the measures amounted to tax increases.