STAND. COM. REP. NO. 141-04

Honolulu, Hawaii

, 2004

RE: H.B. No. 1726

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2004

State of Hawaii

Sir:

Your Committee on Transportation, to which was referred H.B. No. 1726 entitled:

"A BILL FOR AN ACT RELATING TO VEHICLE TAXES,"

begs leave to report as follows:

The purpose of this bill is to mandate each county to impose a tax of one percent of the market value of the vehicle (known as an "ad valorem" tax). This bill also provides for the revenues generated by this tax to be evenly distributed among the counties, the State Highway Fund, and the State general fund.

The Hawaii Transportation Association and Tax Foundation of Hawaii commented on this bill. The Department of Transportation and Hawaii Automobile Dealers Association opposed this measure.

Current county weight tax systems establish a rate system that imposes taxes on vehicles based on their weight. Your Committee finds that taxing a vehicle based on its weight appears to be a regressive tax since luxury car owners and owners of older vehicles of the same weight pay the same tax even though the luxury car owner paid more for their vehicle, making this an inequitable tax.

Your Committee understands the concerns raised by the Hawaii Transportation Association regarding the inherently high cost of vehicles used in their industry and requests that the Committee on Finance explore the possibilities of excluding vehicles weighing more than 10,000 pounds from the ad valorem tax.

As affirmed by the record of votes of the members of your Committee on Transportation that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1726 and recommends that it pass Second Reading and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Transportation,

 

____________________________

JOSEPH M. SOUKI, Chair