STAND. COM. REP. NO. 697

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 972

       S.D. 2

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

 

Madam:

 

     Your Committee on Ways and Means, to which was referred S.B. No. 972, S.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO TAX ADMINISTRATION,"

 

begs leave to report as follows:

 

     The purpose of this measure is to ensure that cash-based businesses operating in Hawaii are paying their proper share of taxes by providing the Department of Taxation with an additional tool to seek compliance from non-compliant businesses.

 

     Specifically, the measure empowers the Department of Taxation to:

 

     (1)  Coordinate with the Department of Commerce and Consumer Affairs on requiring a general excise tax clearance prior to license issuance or renewal for certain regulated industries;

 

     (2)  Coordinate with federal agencies and procurement officers to require general excise tax clearances on federal construction jobs; and

 

     (3)  Coordinate with unions and federal agencies on database and intelligence sharing, along with cooperative auditing of construction work sites for compliance with general excise tax reporting and income tax withholding requirements.

 

     Your Committee received one written comment on this measure.  The written comment may be reviewed on the Legislature's website.

 

     Your Committee finds that this measure will identify cash-based industries and businesses in Hawaii that are susceptible to evading the payment of income, general excise, withholding, and employment taxes.  Your Committee believes that this will allow the Department of Taxation to focus its audit resources on those industries and recapture tax revenues that previously went uncollected.

 

     Your Committee amended this measure by:

 

     (1)  Changing the effective date to July 1, 2090, to facilitate further discussion on the measure; and

 

     (2)  Making technical, nonsubstantive amendments for consistency and clarity.

 

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 972, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 972, S.D. 2.

 

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

 

 

 

____________________________

DONNA MERCADO KIM, Chair