STAND. COM. REP. NO. 811

Honolulu, Hawaii

, 2005

RE: H.B. No. 1720

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 1720 entitled:

"A BILL FOR AN ACT RELATING TO THE GENERAL EXCISE TAX,"

begs leave to report as follows:

The purpose of this bill is to require the Department of Business, Economic Development, and Tourism (DBEDT) and the Department of Taxation (DOTAX) to conduct reviews of statutory exemptions and exclusions from the general excise tax.

DBEDT supported the intent of this bill. DOTAX and a concerned individual opposed this measure. The Tax Foundation of Hawaii offered comments.

Your Committee is concerned about the possible revenue loss resulting from the exemptions and exclusions currently in Hawaii's general excise tax statutes, and believes that an examination of these exemptions and exclusions would provide legislators with the information needed to formulate future tax policy. Therefore, your Committee has taken into consideration informed testimony on this measure, and has amended this bill by:

(1) Requiring a single, rather than periodic, review of the exemptions and exclusions from the general excise tax;

(2) Requiring the Tax Review Commission, rather than DBEDT and DOTAX, to conduct the review;

(3) Requiring the Tax Review Commission to submit a preliminary report detailing its progress no later than 20 days prior to the convening of the Regular Session of 2006, and a final report no later than 20 days prior to the convening of the Regular Session of 2007;

(4) Deleting exemptions from confidentiality privileges relating to taxpayer communications; and

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

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 H.B. No. 1720, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1720, 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 TAKAMINE, Chair