HOUSE OF REPRESENTATIVES

H.R. NO.

142

TWENTY-EIGHTH LEGISLATURE, 2015

 

STATE OF HAWAII

 

 

 

 

 

HOUSE RESOLUTION

 

 

Requesting the department of taxation to annually publish a tax expenditure report.

 

 

 


     WHEREAS, states spend tens, maybe hundreds, of billions of dollars through tax expenditures each year; and

 

     WHEREAS, tax expenditures are tax credits, deductions, and exemptions that reduce state revenue and include poverty-reducing tax credits, middle class benefits, and corporate subsidies; and

 

     WHEREAS, tax expenditures cost state treasuries money in much the same way as direct spending for schools, health care, or road construction; and

 

     WHEREAS, like direct spending, tax expenditures are a tool states can use to accomplish policy goals; and

 

     WHEREAS, a key difference between direct spending and tax expenditures is that states typically require extensive documentation of how much direct spending they do each year and by contrast, tax expenditures usually receive far less scrutiny; and

 

     WHEREAS, policy makers do not regularly examine tax expenditures, nor do states document their effectiveness the same way they do for on-budget expenditures; and

 

     WHEREAS, most tax expenditures are written into the tax code and thus will continue indefinitely, regardless of how costly they may become over time, unless the Legislature acts to discontinue them; and
     WHEREAS, without information on a particular tax expenditure's costs and benefits, Hawaii's lawmakers cannot make an informed decision on whether its continuation is in the State's interest; now, therefore,

 

     BE IT RESOLVED by the House of Representatives of the Twenty-eighth Legislature of the State of Hawaii, Regular Session of 2015, that the State Department of Taxation is requested to annually publish a tax expenditure report; and

 

     BE IT FURTHER RESOLVED that the tax expenditure report include the following:

 

(1)  A description of the tax expenditure;

 

(2)  The relevant legal citation and year of enactment;

 

(3)  The purpose of the tax expenditure;

 

(4)  The cost of the tax expenditure, using current data;

 

(5)  The cost of the tax expenditure in future years, to allow comparison with other proposed expenditures;

 

(6)  Details on the taxpayers who benefit from the tax expenditure;

 

(7)  The extent to which the purpose of the tax expenditure has been accomplished;

 

(8)  The distribution of benefits of the tax expenditure by income level and size of business;

 

(9)  The impact of tax expenditures that can be deferred or transferred; and

 

(10) Separate reporting for state and local revenue losses, where applicable; and

 

     BE IT FURTHER RESOLVED that the State Department of Taxation may consider modeling Oregon, Minnesota, the District of Columbia, and other jurisdictions that publish relatively comprehensive and informative tax expenditure reports; and

 

     BE IT FURTHER RESOLVED that the Department of Taxation is requested to annually publish its tax expenditure report no later than twenty days prior to the convening of each regular session; and

 

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

 

 

 

 

OFFERED BY:

_____________________________

 

 

Report Title: 

Taxation; Tax expenditure; Report