Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Economic Development and Business Concerns, to which was referred H.B. No. 459 entitled:

begs leave to report as follows:

The purpose of this bill is to establish an annual general excise tax holiday for a period not to exceed three days each year. Under the tax holiday, sales of clothing and footwear under $100 would be exempt from the normal retail or general excise tax of four percent. Because the tax is imposed on the seller rather than the buyer, the only requirement is that the tax savings be passed on to the consumer.

Retail Merchants of Hawaii and the National Federation of Independent Business testified in support of this bill. The Department of Taxation and the Department of Budget and Finance opposed this bill. The Tax Foundation of Hawaii commented on this bill.

Your Committee finds that a tax holiday will stimulate retail sales and provide a boost to our economy.

Your Committee has amended this bill by removing the provision that no special reporting procedures are necessary to report exempt sales during the exemption holiday period.

As affirmed by the record of votes of the members of your Committee on Economic Development and Business Concerns that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 459, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 459, H.D. 1, and be referred to the Committee on Finance.