STAND. COM. REP. 476

Honolulu, Hawaii

, 2003

RE: H.B. No. 1631

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred H.B. No. 1631 entitled:

"A BILL FOR AN ACT RELATING TO THE GENERAL EXCISE TAX,"

begs leave to report as follows:

The purpose of this measure is to extend the existing general excise tax (GET) exemptions for condominium common expenses paid by managers, and hotel employee expenses paid by hotel operators, to include amounts received by:

    1. The submanager of an association of apartment owners or a nonprofit homeowners community association in reimbursement for sums paid for common expenses;
    2. The operator of a hotel from a timeshare operation equal to and which are disbursed for employee wages, salaries, payroll taxes, and insurance premiums and benefits; and
    3. The suboperator of a hotel from the hotel owner, a timeshare association, or the hotel operator, equal to and which are disbursed by a suboperator for employee wages, salaries, payroll taxes, and insurance premiums and benefits.

Outrigger Hotels submitted testimony in support of this measure. The Department of Taxation and Tax Foundation of Hawaii offered comments.

Your Committee agrees that extending the existing GET exemption to include expenses paid by condominium submanagers and hotel suboperators, as well as expenses of timeshare projects would extend equitable treatment to taxpayers in similar situations. Your Committee understands that this bill would allow local companies to operate in the same way as companies on the mainland do without any significant loss of tax revenue.

However, your Committee is also aware that the Department of Taxation is willing to meet with the interested parties and discuss this measure further. Accordingly, your Committee has amended this measure by changing the effective date to July 1, 2050, to facilitate further discussions.

As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1631, as amended herein, and recommends that it be referred to the Committee on Finance in the form attached hereto as H.B. No. 1631, H.D. 1.

 

Respectfully submitted on behalf of the members of the Committee on Consumer Protection and Commerce,

 

____________________________

KENNETH T. HIRAKI, Chair