STAND. COM. REP. NO. 467

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1193

       S.D. 1

 

 

 

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

 

Madam:

 

     Your Committee on Ways and Means, to which was referred S.B. No. 1193 entitled:

 

"A BILL FOR AN ACT RELATING TO SECTION 237-24.3, HAWAII REVISED STATUTES,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to eliminate the general excise tax exemption for liquor, tobacco, and food sold to any person or common carrier in interstate or foreign commerce for consumption out of state.

 

     Your Committee received testimony in support of this measure from the Department of Taxation.  The North West and Canada Cruise Association testified in opposition to the measure.  The Tax Foundation of Hawaii submitted comments.

 

     Your Committee finds that the tax exemption provided by section 237-24.3(2)(C), Hawaii Revised Statutes, was intended to incentivize the purchase of food from local agricultural sources.  However, in its present form, the exemption applies to any person selling any food to common carriers for consumption out of state.  Your Committee finds that this broad exemption should be eliminated because it defeats the original purpose of the exemption and provides an unnecessary tax break to common carriers and the catering companies that serve those common carriers.

 

     Your Committee has amended this measure by:

 

     (1)  Changing the effective date to July 1, 2050; and

 

     (2)  Making technical nonsubstantive amendments for the purposes of clarity, consistency, and style.

 

     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. 1193, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1193, S.D. 1, and be placed on the calendar for Third Reading.

 

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

 

 

 

____________________________

DAVID Y. IGE, Chair