STAND. COM. REP. NO.  420-08

 

Honolulu, Hawaii

                , 2008

 

RE:   H.B. No. 1629

      H.D. 1

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

 

Sir:

 

     Your Committee on Economic Development & Business Concerns, to which was referred H.B. No. 1629 entitled:

 

"A BILL FOR AN ACT RELATING TO CORPORATION INCOME TAX,"

 

begs leave to report as follows:

 

     The purpose of this bill is to significantly reduce burdens on business in Hawaii by repealing the corporate income tax.

 

     The Department of Taxation (DOTAX) supported this measure.  The Tax Foundation of Hawaii provided comments.

 

     While the repeal of the corporate income tax would have the commendable effect of improving the business climate for corporations, DOTAX pointed out that the repeal would result in a revenue loss of approximately $81,000,000 per year.

 

     Your Committee would like to ensure that the savings realized by corporations under this measure will be invested in Hawaii's economy.  Upon further reflection, your Committee has amended this bill by replacing its substance with a tax credit equal to 100 percent of a corporation's income tax liability.  The credit may be claimed by qualified corporations that pay 100 percent of their employees at least the prevailing wage.

 


     As affirmed by the record of votes of the members of your Committee on Economic Development & Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1629, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1629, H.D. 1, and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Economic Development & Business Concerns,

 

 

 

 

____________________________

KYLE T. YAMASHITA, Chair