STAND. COM. REP. NO.  481

 

Honolulu, Hawaii

                , 2009

 

RE:   H.B. No. 82

      H.D. 1

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

 

Sir:

 

     Your Committee on Economic Revitalization, Business, & Military Affairs, to which was referred H.B. No. 82 entitled:

 

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

 

begs leave to report as follows:

 

     The purpose of this measure is to provide a limited general excise tax exemption or holiday for certain school supplies and clothing.

 

     Specifically, this measure provides an annual general excise tax holiday of five days, beginning on Wednesday of the last full week in July for school supplies and clothing, including books, computers, computer software, and supplies.  The tax holiday does not apply to cellular telephones, watches, radios, sporting equipment, copiers and other office equipment, and other non-essential school items.

 

     Your Committee received testimony in support of this measure from the Department of Taxation, the Retail Merchants of Hawaii, and the Hawaii State Teachers Association.  The Tax Foundation of Hawaii submitted comments on this measure.

 

     Your Committee finds that the tax holiday provided under this measure will not only stimulate a sagging state economy, but will also support education by providing financial assistance to students preparing for the upcoming academic year.  Your Committee also finds that in 2008, sixteen states held tax holidays, usually during the back-to-school season in late summer.

 

     Your Committee has amended the measure by:

 

     (1)  Adding a purpose section;

 

     (2)  Adding definitions for "book", "clothing", and "computer", clarifying the definitions of "computer software" and "school supplies", and deleting the definition of "personal computers";

 

     (3)  Changing the time period of the tax holiday;

 

     (4)  Deleting video games of a non-essential nature from the list of items that are not exempt from the general excise tax;

 

     (5)  Changing price restrictions on certain school supplies;

 

     (6)  Deleting provisions with respect to:  special licenses and reporting procedures for retailers; clarification of exempt items by rule; sales restrictions for retailers; and tax refunds; and

 

     (7)  Changing the effective date to July 1, 2112, to facilitate further discussion on this measure.

 

     As affirmed by the record of votes of the members of your Committee on Economic Revitalization, Business, & Military Affairs that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 82, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 82, H.D. 1, and be referred to the Committee on Finance.

 

Respectfully submitted on behalf of the members of the Committee on Economic Revitalization, Business, & Military Affairs,

 

 

 

 

____________________________

ANGUS L.K. MCKELVEY, Chair