STAND. COM. REP. NO. 1331

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 92

       H.D. 1

       S.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fourth State Legislature

Regular Session of 2007

State of Hawaii

 

Madam:

 

     Your Committee on Economic Development and Taxation, to which was referred H.B. No. 92, H.D. 1, S.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO THE GENERAL EXCISE TAX,"

 

begs leave to report as follows:

 

     The purpose of this measure is to promote the fair application of the general excise tax (GET) by allowing securities professionals to pay the general excise tax only on their respective share of commissions divided among a number of persons.

 

     Your Committee received testimony in support of this measure from the National Association of Insurance and Financial Advisors; Brookstreet Securities Corporation; Linsco/Private Ledger Corp.; and one individual.  The Department of Taxation (Department) and the Hawaii Tax Foundation submitted comments on this measure.

 

     The Department submitted testimony that the fiscal impact of this measure would be a revenue loss of $1,400,000 annually.  In its methodology, the Department stated that data on GET collected on non-insurance commissions was used to make the estimates, with adjustments made to remove real estate and other commissions.

 

     Your Committee finds that where two or more securities professionals share compensation, each should only be required to pay taxes on their respective portions, rather than on the entire compensation.  This measure would address a long-standing inequity in Hawaii tax law.

 

 

     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. 92, H.D. 1, S.D. 1, and recommends that it 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