CONFERENCE COMMITTEE REP. NO. 75-10

 

Honolulu, Hawaii

                 , 2010

 

RE:    S.B. No. 2643

       S.D. 1

       H.D. 1

       C.D. 1

 

 

 

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

 

Madam and Sir:

 

     Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 2643, S.D. 1, H.D. 1, entitled:

 

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

 

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

 

     The purpose of this measure is to:

 

     (1)  Make the general excise tax exemption for condominium common expenses paid by managers, submanagers, and suboperators, and for hotel employee expenses paid by hotel operators and timeshare projects permanent;

 

     (2)  Make the $400,000 limit on the general excise tax exemption established under Act 196, Session Laws of Hawaii 2009 permanent; and

 

     (3)  Make the general excise tax exemption retroactive to July 1, 2006.

 

     Your Committee finds that Act 239, Session Laws of Hawaii 2007, established a general excise tax exemption for condominium submanagers, suboperators, and timeshare associations.  This tax exemption was set to expire on December 31, 2009.  In 2009, the Legislature extended the tax exemption in Act 196, Session Laws of Hawaii 2009, through December 31, 2010.  Act 196 also included an aggregate cap of $400,000 for the tax exemption.

 

     Your Committee further finds that, in enacting this general excise tax exemption, the Legislature intended to level the playing field with regard to similarly situated entities for the payment of monies to a hotel operator for employee wages, salaries, payroll taxes, insurance premiums, and benefits, including retirement, vacation, sick pay, and health benefits.  Therefore, the exemption for condominium submanagers, suboperators, and timeshare associations should be made permanent.

 

     Your Committee notes that in passing Act 196, Session Laws of Hawaii 2009, the Legislature intended to impose a $400,000 cap on the tax liability amount, not the gross receipts amount.  Accordingly, your Committee further finds that Act 196, Session Laws of Hawaii 2009, should be clarified to reflect that the aggregate cap of $400,000 should apply to the aggregate tax liability, not gross receipts.

 

     Your Committee on Conference has amended this measure by:

 

     (1)  Deleting its contents and reverting back to the contents of the S.D. 1 version of S.B. No. 2643, which includes the general excise tax exemption and same limitation amount, but keeps the general excise tax exemption temporary by retaining it in the Session Laws of Hawaii;

 

     (2)  Extending the repeal date of section 4 of Act 239, Session Laws of Hawaii 2007, as amended by section 5 of Act 196, Session Laws of Hawaii 2009, to December 31, 2014; and

 

     (3)  Changing the effective date to July 1, 2010.

 

     As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 2643, S.D. 1, H.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 2643, S.D. 1, H.D. 1, C.D. 1.

 

Respectfully submitted on behalf of the managers:

 

ON THE PART OF THE HOUSE

 

ON THE PART OF THE SENATE

 

____________________________

JOEY MANAHAN, Co-Chair

 

____________________________

ROSALYN H. BAKER, Chair

____________________________

GLENN WAKAI, Co-Chair

 

____________________________

CLARENCE K. NISHIHARA, Co-Chair

____________________________

JAMES KUNANE TOKIOKA, Co-Chair

 

____________________________

DONNA MERCADO KIM, Co-Chair