STAND. COM. REP. NO. 1741

                                 Honolulu, Hawaii
                                                   , 1999

                                 RE: S.B. No. 1180
                                     S.D. 1
                                     H.D. 1




Honorable Calvin K.Y. Say
Speaker, House of Representatives
Twentieth State Legislature
Regular Session of 1999
State of Hawaii

Sir:

     Your Committee on Finance, to which was referred S.B. No.
1180, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO THE INCOME TAXATION OF
     NONRESIDENTS,"

begs leave to report as follows:

     The purpose of this bill is to modify the income tax law by:

     (1)  Revising the formula for calculating the income tax for
          nonresidents; and

     (2)  Prohibiting the Department of Taxation from exempting
          employers from the withholding of taxes.

     The Chamber of Commerce of Hawaii testified in support of
this measure.  The Department of Taxation testified in support of
the measure except for section 5.  The University of Nations,
PricewaterhouseCoopers, LLP, the Retirees Unit of the Hawaii
Government Employees Association, Alexander and Baldwin, Inc.,
Aloha Airlines, the Tax Foundation of Hawaii, and Bank of Hawaii
commented on the measure.

     Your Committee has amended the bill by:

     (1)  Deleting the prohibition of the Department of Taxation
          from exempting employers from the withholding of taxes;
          and

 
 
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     (2)  Making technical, nonsubstantive revisions for style
          and clarity.

     As affirmed by the record of votes of the members of your
Committee on Finance that is attached to this report, your
Committee is in accord with the intent and purpose of S.B. No.
1180, S.D. 1, as amended herein, and recommends that it pass
Second Reading in the form attached hereto as S.B. No. 1180, S.D.
1, H.D. 1, and be placed on the calendar for Third Reading.

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



                                   ______________________________
                                   DWIGHT Y. TAKAMINE, Chair