STAND. COM. REP. NO. 3055

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 2961

       H.D. 2

       S.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

 

Madam:

 

     Your Committee on Economic Development and Taxation, to which was referred H.B. No. 2961, H.D. 2, entitled:

 

"A BILL FOR AN ACT RELATING TO TAXATION,"

 

begs leave to report as follows:

 

     The purpose of this measure is to evaluate the impact of various high technology tax incentives on Hawaii's economy.

 

     Specifically, this measure authorizes the Department of Taxation to conduct various studies on existing and proposed tax incentives, including the high technology business investment tax credit and the tax credit for research activities.  This measure also makes an appropriation to carry out the purposes of this measure.

 

     Testimony in support of this measure was submitted by the Hawaii Government Employees Association, Hawaii State Teachers Association, Hawaii Association of REALTORS, and Retail Merchants of Hawaii.  Comments on this measure were submitted by the Department of Taxation and the Tax Foundation of Hawaii.

 

     Your Committee finds that numerous other states have adopted the National Streamlined Sales and Use Tax Project approach in streamlining their tax systems to avoid further erosion of their tax bases in the global economy.  Your Committee previously heard and passed S.B. No. 2829 S.D. 1, a measure that will position Hawaii to adopt the necessary changes to bring its tax system into compliance with the national Streamlined Sales and Use Tax Agreement.  Your Committee has amended this measure by deleting the content of H.B. No. 2961, H.D. 2, and replacing the content with S.B. No. 2829 S.D. 1.  As amended, this measure:

 

     (1)  Will support Hawaii's participation in the national Streamlined Sales and Use Tax Agreement which will level the playing field between local and out-of-state retailers on the collection and remittance of general excise and use taxes on purchases by Hawaii residents; and

 

     (2)  Will establish a streamlined system of tax collection for sellers in a global economy that will still respect the sovereignty of state borders.

 

     Accordingly, it is the intent of your Committee to support allowing Hawaii to participate fully in the Streamlined Sales and Use Tax Agreement.  Your Committee finds that a measured and orderly approach toward stabilizing Hawaii’s tax revenue base is an important step in establishing confidence in the State of Hawaii’s ability to withstand the challenges of major economic downturns.

 

     As affirmed by the record of votes of the members of your Committee on Economic Development and Taxation that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2961, H.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2961, H.D. 2, S.D. 1, and be referred to the Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committee on Economic Development and Taxation,

 

 

 

____________________________

CAROL FUKUNAGA, Chair