STAND. COM. REP. NO. 44

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1007

       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 Commerce, Consumer Protection, and Affordable Housing, to which was referred S.B. No. 1007 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 require an investment broker and agent who share compensation for their services to pay the general excise tax on only that portion of the compensation retained by each.

 

     Your Committee received testimony in support of this measure from Linsco/Private Ledger Corporation, SunAmerica Securities Inc., Brookstreet Securities Corporation, the National Association of Insurance and Financial Advisors Hawaii, and an individual.

 

     Your Committee received comments on this measure from the Department of Taxation and the Tax Foundation of Hawaii.

 

     Your Committee finds that where an investment broker and agent share compensation, each should only be required to pay taxes on their respective portions, rather than on the entire compensation.

 

     The intent of this measure is to add investment brokers and agents to the list of persons in section 237-18, Hawaii Revised Statutes, who are only required pay general excise tax on the portion of compensation they retain individually, rather than on the whole compensation received.

 

     Your Committee has amended this measure by changing the effective date upon which the new taxing structure applies from gross income or gross proceeds received after December 31, 2006, to gross income or gross proceeds received after June 30, 2007.

 

     As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Affordable Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1007, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1007, S.D. 1, and be referred to the Committee on Economic Development and Taxation.

 

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection, and Affordable Housing,

 

 

 

____________________________

BRIAN T. TANIGUCHI, Chair