STAND. COM. REP. NO.934

Honolulu, Hawaii

, 2003

RE: S.B. No. 632

S.D. 2

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 632, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION APPEALS,"

begs leave to report as follows:

The purpose of this measure is to allow an aggrieved taxpayer to appeal a disputed tax assessment with the Tax Appeal Court without prepaying the tax.

Presently, an aggrieved taxpayer may appeal most disputed tax assessments to either the Board of Review or the Tax Appeal Court. Unlike the Tax Appeal Court, the Board of Review does not require a taxpayer to prepay a disputed tax before an appeal. This requirement treats taxpayers differently based on the nature of their complaint. A taxpayer whose case involves a constitutional or federal law issue must appeal to the Tax Appeal Court and prepay the disputed tax. For other types of tax cases, an appeal to the Board of Review will not require a tax prepayment.

Your Committee also finds that, under federal law, an aggrieved taxpayer disputing an Internal Revenue Service assessment may appeal to either the Internal Revenue Service Appeals Office (comparable to the Board of Review) or the United States Tax Court (comparable to the Tax Appeal Court) without prepaying the disputed federal tax.

This bill provides equitable treatment to all aggrieved taxpayers, by eliminating the prepayment requirement for tax appeals made to the Tax Appeal Court.

Your Committee has amended the bill to clarify that payment of the disputed tax is required by a taxpayer who appeals a decision of the Tax Appeal Court.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 632, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 632, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

BRIAN T. TANIGUCHI, Chair