Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 1684, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to conform Hawaii law to the newly enacted federal Mobile Telecommunications Sourcing Act (MTSA), which provides a uniform method for determining which state has jurisdiction to impose taxes on wireless services.

Under MTSA, wireless telecommunications may be taxed by a state if the source of these communications is in the state. MTSA "sources" wireless calls to the wireless subscriber's residential or business address, whichever is the place of primary use. This measure amends state law to adopt the MTSA sourcing methodology and allows the State to assess taxes on wireless services as of August 1, 2002.

Verizon Wireless, VoiceStream, and AT&T testified in support of this measure. The Department of Taxation supported the intent of this measure. The Tax Foundation of Hawaii submitted comments.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1684, H.D. 1, and recommends that it pass Third Reading.