Report Title:

GET Exemptions/Exclusions; DoTax/DBEDT Biennial Review & Report

Description:

Requires DBEDT and DoTax to perform biennial reviews, quantifying and reporting on the exemptions and exclusions from the general excise tax and recommending whether the benefits justify the cost. Requires disclosure of individuals and companies receiving exemptions and waives confidentiality.

HOUSE OF REPRESENTATIVES

H.B. NO.

1720

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

relating to the general excise tax.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that, over the years, the State has seen the creation and implementation of a plethora of exemptions and exclusions from the general excise tax. These exemptions and exclusions were created for a variety of reasons, including stimulating economic growth, assisting local businesses, creating new jobs, or some other reasons that benefit the State. However, some of these exemptions and exclusions have been in effect for decades with no apparent logical justification or little or no benefit to the State. The legislature finds that a review of all exemptions and exclusions from the general excise tax is essential to providing the most cost-effective and efficient use of taxpayer dollars. Because the State has never conducted a systematic review of these exemptions and exclusions from the general excise tax, this review is necessary to ensure that the original justifications still apply.

The purpose of this Act is to require a periodic review of exemptions and exclusions to the general excise tax granted to certain taxpayers.

SECTION 2. Chapter 201, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§201- Exemptions and exclusions to imposition of general excise tax; biennial review; report; confidentiality. (a) Beginning on July 1, 2006, the director of business, economic development, and tourism shall jointly conduct, with the director of taxation, biennial reviews of statutory exemptions and exclusions to the imposition of the general excise tax for certain taxpayers. For the periods indicated, the director shall jointly review with the director of taxation, all the exemptions and exclusions in the following statutes in accordance with the schedule set forth below:

(1) July 1, 2006 to June 30, 2008:

(A) Section 237-23

(B) Section 237-23.5;

(C) Section 237-24;

(D) Section 237-24.3;

(E) Section 237-24.5;

(F) Section 237-24.7; and

(G) Section 237-24.75;

(2) July 1, 2008 to June 30, 2010:

(A) Section 237-24.8;

(B) Section 237-24.9;

(C) Section 237-25;

(D) Section 237-26;

(E) Section 237-27;

(F) Section 237-27.1;

(G) Section 237-27.5;

(H) Section 237-27.6;

(I) Section 237-28.1;

(J) Section 237-28.2;

(K) Section 237-29;

(L) Section 237-29.5;

(M) Section 237-29.53;

(N) Section 237-29.55;

(O) Section 237-29.65;

(P) Section 237-29.7;

(Q) Section 237-29.75; and

(R) Section 237-29.8.

(b) No later than three months after the end of each biennial period of review, the director shall submit a joint report with the director of taxation to the governor and the legislature. Each report shall:

(1) Quantify the total dollar amount of exemptions and exclusions granted:

(A) For each category reviewed; and

(B) During each period under review,

broken down by:

(i) Specific category of taxpayers exempted or excluded; and

(ii) Specific companies or individuals exempted or excluded; and

(2) Recommend:

(A) For each category reviewed; and

(B) During each period under review,

whether the exemptions and exclusions created benefits that justify the cost.

(c) Any other law to the contrary notwithstanding, for the purposes of section (b)(1)(B)(ii), section 231-1.5 with respect to confidentiality privileges relating to taxpayer communications shall not apply."

SECTION 3. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237- Exemptions and exclusions to imposition of general excise tax; biennial review; report, confidentiality. (a) Beginning on July 1, 2006, the director of taxation, shall jointly conduct, with the director of business, economic development, and tourism, biennial reviews of statutory exemptions and exclusions to the imposition of the general excise tax for certain taxpayers. For the periods indicated, the director shall jointly review with the director of business, economic development, and tourism, the following exemptions and exclusions in the following statutes in accordance with the schedule set forth below:

(1) July 1, 2006 to June 30, 2008:

(A) Section 237-23

(B) Section 237-23.5;

(C) Section 237-24;

(D) Section 237-24.3;

(E) Section 237-24.5;

(F) Section 237-24.7; and

(G) Section 237-24.75;

(2) July 1, 2008 to June 30, 2010:

(A) Section 237-24.8;

(B) Section 237-24.9;

(C) Section 237-25;

(D) Section 237-26;

(E) Section 237-27;

(F) Section 237-27.1;

(G) Section 237-27.5;

(H) Section 237-27.6;

(I) Section 237-28.1;

(J) Section 237-28.2;

(K) Section 237-29;

(L) Section 237-29.5;

(M) Section 237-29.53;

(N) Section 237-29.55;

(O) Section 237-29.65;

(P) Section 237-29.7;

(Q) Section 237-29.75; and

(R) Section 237-29.8.

(b) No later than three months after the end of each biennial period of review, the director shall submit a joint report with the director of business, economic development, and tourism to the governor and the legislature. Each report shall:

(1) Quantify the total dollar amount of exemptions and exclusions granted:

(A) For each category reviewed; and

(B) During each period under review,

broken down by:

(i) Specific category of taxpayers exempted or excluded; and

(ii) Specific companies or individuals exempted or excluded; and

(2) Recommend:

(A) For each category reviewed; and

(B) During each period under review,

whether the exemptions and exclusions created benefits that justify the cost.

(c) Any other law to the contrary notwithstanding, for the purposes of section (b)(1)(B)(ii), section 231-1.5 with respect to confidentiality privileges relating to taxpayer communications shall not apply."

SECTION 4. New statutory material is underscored.

SECTION 5. This Act shall take effect upon its approval.

INTRODUCED BY:

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