HOUSE OF REPRESENTATIVES

H.C.R. NO.

135

TWENTY-THIRD LEGISLATURE, 2005

 

STATE OF HAWAII

 
   


HOUSE CONCURRENT

RESOLUTION

 

URGING THE DEPARTMENT OF TAXATION TO ENFORCE THE GENERAL EXCISE TAX LAW ON all AUTOMOBILE SALES.

 

 

WHEREAS, there are political considerations involved in raising taxes, and yet there are challenges involved in doing all that needs to be done with limited tax dollars; and

WHEREAS, there is a means of making additional tax dollars available (approximately $23,854,000 annually) without creating any new tax legislation; and

WHEREAS, for more than forty years, Hawaii law has provided for the collection of a four per cent tax on sales of automobiles. Unfortunately, however, no general excise tax has ever been collected on approximately sixty per cent of the vehicles sold annually in Hawaii, namely, those sold by private individuals; and

WHEREAS, most states tax auto sales, and like Hawaii, require that a new car dealer collect a tax at the time of a sale and forward that tax to the state tax department. Unlike Hawaii, however, most states also collect a sales tax on vehicles sold privately, usually by authorizing the collection of a sales tax from the new registered owner or buyer at the time of the transfer of title; and

WHEREAS, of the estimated 172,770 vehicles sold in Hawaii each year, about sixty-three per cent (or 119,270) are sold privately. Assuming an average sale price of $5,000, this means the State is failing to collect at least $24,000,000 in tax revenues every year; and

WHEREAS, this infusion of tax dollars requires no new taxation legislation. It is simply a matter of instructing the relevant public agency to collect the sales tax when processing the transfer of title and registration; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2005, the Senate concurring, that the Department of Taxation is requested to enforce the general excise tax laws on all automobile sales; and

BE IT FURTHER RESOLVED that a certified copy of this Concurrent Resolution be transmitted to the Director of Taxation.

 

 

 

OFFERED BY:

_____________________________

Report Title:

GET; Sale of All Automobiles