HOUSE OF REPRESENTATIVES

H.B. NO.

956

TWENTY-SEVENTH LEGISLATURE, 2013

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO DELINQUENT TAXES.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The purpose of this Act is to set a reasonableness standard for when a tax is deemed uncollectible, rather than the minimum two-year period currently existing in the statute.  This will allow the department of taxation to concentrate on the accounts that will likely generate the greatest recovery to the State.  The proposed amendments will allow the department to consider various factors in determining when an account is uncollectible.  Currently, even if an account is uncollectible, the department must wait two years before deeming it uncollectible.  This creates undue stress and anxiety to the taxpayer who may have health or other insurmountable financial problems.  This also will relieve the department of keeping track of numerous small claims where the costs of collection, including employee time, will exceed any expected recovery.

     SECTION 2.  Section 231-32, Hawaii Revised Statutes, is amended to read as follows:

     "§231-32  Records of delinquent taxes, uncollectible delinquent taxes.  The department of taxation shall prepare and maintain, open to public inspection, a complete record of the amounts of taxes assessed in each district that have become delinquent with the name of the delinquent taxpayer in each case, but it shall not be necessary to periodically compute on the records the amount of penalties and interest upon delinquent taxes.

     The department may from time to time prepare lists of all taxes delinquent which in its judgment are uncollectible.  Such taxes as the department finds to be uncollectible shall be entered in a special record and be deleted from the other books kept by the department, and the department shall thereupon be released from any further accountability for their collection; provided that no account shall be so deleted [until it shall have been delinquent for at least two years.] except for reasonable cause, considering such factors as the financial condition of the taxpayer, inability to locate the taxpayer, costs of collection against the amount of tax owed, health of the taxpayer, and future income prospects of the taxpayer.  Any items so written off may be transferred back to the delinquent tax roll if the department finds that the alleged facts as previously presented to it were not true, or that such items are in fact collectible."

     SECTION 3.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 4.  This Act upon its approval shall take effect on January 1, 2013.

 

INTRODUCED BY:

_____________________________

 

 

BY REQUEST


 


 

Report Title:

Delinquent Taxes

 

Description:

Establishes a reasonableness standard for when a tax is deemed uncollectible.

 

 

 

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