STAND. COM. REP. NO. 3315

 

Honolulu, Hawaii

                  

 

RE:    H.B. No. 2370

       H.D. 1

       S.D. 1

 

 

 

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

 

Madam:

 

     Your Committee on Ways and Means, to which was referred H.B. No. 2370, H.D. 1, entitled:

 

"A BILL FOR AN ACT RELATING TO TAXATION,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to amend the current state law regarding the partial payment of taxes.

 

     More specifically, this measure requires that a partial payment of taxes be credited in equal amounts to interest, penalties, and principal.

 

     Your Committee received testimony in support of this measure from The Chamber of Commerce of Hawaii.  Your Committee received testimony in opposition to this measure from the Department of Taxation.  Your Committee received comments on this measure from the Tax Foundation of Hawaii.

 

     Your Committee finds that, under current state law, moneys received by the Department of Taxation for the partial payment of a tax are applied first to interest, then to penalties, and then finally to principal.  Your Committee also finds that allowing taxpayers to repay their tax-debt principal before penalties and interest would make it easier for them to repay their entire debt.  Your Committee believes that this measure will reduce taxpayers' tax burden by enabling them to repay their taxes in a timelier manner, while also ensuring that all principal and penalties properly due to the State would still be paid in full by taxpayers along with any applicable interest.

 

     Your Committee has amended this measure by:

 

     (1)  Requiring that a partial payment of taxes be credited first to principal, then to interest, and then to penalties; and

 

     (2)  Inserting a savings clause to clarify that the amendments contained in the measure will apply prospectively.

 

     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 H.B. No. 2370, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2370, H.D. 1, 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