STAND. COM. REP. NO.  428

 

Honolulu, Hawaii

                , 2015

 

RE:   H.B. No. 133

      H.D. 1

 

 

 

 

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

 

Sir:

 

     Your Committee on Tourism, to which was referred H.B. No. 133 entitled:

 

"A BILL FOR AN ACT RELATING TO TAXATION,"

 

begs leave to report as follows:

 

     The purpose of this measure is to provide incentives for investment in tourism infrastructure through an income tax credit for costs incurred in new hotel construction.

 

     The Hawaii Lodging and Tourism Association, Maui Hotel and Lodging Association, Subcontractors Association of Hawaii, Napili Kai Beach Resort, and Outrigger Enterprises Group supported this measure.  The Department of Taxation and Tax Foundation of Hawaii offered comments.

 

     Your Committee has amended this measure by:

 

     (1)  Expanding the income tax credit to include costs incurred in hotel renovation;

 

     (2)  Clarifying the income tax credit availability for taxable years beginning after December 31, 2015, through taxable years beginning on or before December 31, 2021; and

 

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

     Should the Committee on Finance deliberate this measure further, your Committee respectfully requests that it consider looking into whether eligibility for the tax credit should be predicated on taxpayer liability for both income tax and transient accommodations tax, since this requirement may limit the number of taxpayers eligible for the credit.  For example, many hotels are large operations with multiple subsidiaries, and it is possible that the entity incurring construction or renovation costs is not the same entity that operates the hotel as a transient accommodation.

 

     As affirmed by the record of votes of the members of your Committee on Tourism that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 133, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 133, H.D. 1, and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Tourism,

 

 

 

 

____________________________

TOM BROWER, Chair