STAND. COM. REP. NO. 2448

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2512
                                        




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 2512 entitled: 

     "A BILL FOR AN ACT RELATING TO THE INCOME TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to authorize a full income
tax deduction for business meals and entertainment expenses, and
to allow club dues as business entertainment expenses.

     Testimony in favor of this measure was submitted by the
National Federation of Independent Business-Hawaii, Hawai`i Hotel
Association, Hawai`i Restaurant Association, and Legislative
Information Services of Hawaii.  The Department of Taxation
testified that it was not opposed.  The Tax Foundation of Hawaii
submitted comments.

     Your Committee finds that this measure would raise the tax
deduction for business meals and entertainment from fifty per
cent to one hundred per cent, which would provide a benefit both
for the business person and for Hawaii's restaurants and related
businesses.  Your Committee recognizes that increasing the
federal income tax deduction is key to helping Hawaii's business
community.  Your Committee also understands that such a measure
is being considered in Congress, as well.

     As affirmed by the record of votes of the members of your
Committee on Ways and Means that is attached to this report, your
Committee is in accord with the intent and purpose of S.B.

 
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                                   STAND. COM. REP. NO. 2448
                                   Page 2


No. 2512 and recommends that it pass Second Reading and be placed
on the calendar for Third Reading.

                                 Respectfully submitted on behalf
                                 of the members of the Committee
                                 on Ways and Means,



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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