This Act seeks to accelerate the depyramiding of the general excise tax on certain intermediary services.

A BILL FOR AN ACT

SECTION 1. The legislature finds that the economy of Hawaii has been stimulated by prior tax rate reductions. Accelerating tax reductions should help contribute to improving economic and business conditions. Act 71, Session Laws of Hawaii, 1999, began a reduction of the general excise tax on intermediary services phased in over a seven-year period. The purpose of this Act is to accelerate the reduction in the general excise tax on the intermediary sale of services.

SECTION 2. Section 237-13.3, Hawaii Revised Statutes, is amended to read as follows:

"§237-13.3 Application of sections 237-4(a)(8), 237-4(a)(10), 237-4(a)(13), 237-13(2)(A), 237-13(4)(A), and 237-13(6)(A). (a) Sections 237-4(a)(8), 237-4(a)(10), 237-4(a)(13), 237-13(2)(A), 237-13(4)(A), and 237-13(6)(A) to the contrary notwithstanding, instead of the tax levied under section 237-13(2)(A) on wholesale sales subject to section 237-4(a)(8)(B), under section 237-13(4)(A) on a wholesaler subject to section 237-4(a)(13), and under section 237-13(6)(A) on a wholesaler subject to section 237-4(a)(10) at one-half of one percent, during the period January 1, 2000, to December 31, 2005, the tax shall be as follows:

(1) In calendar year 2000, 3.5 per cent;

(2) In calendar year 2001, 3.0 per cent;

(3) In calendar year 2002, [2.5] 1.5 per cent;

(4) In calendar year 2003, 2.0 per cent;

(5) In calendar year 2004, 1.5 per cent;

(6) In calendar year 2005, 1.0 per cent; and