STAND. COM. REP. NO.463
Honolulu, Hawaii
, 2001
RE: S.B. No. 198
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Regular Session of 2001
State of Hawaii
Sir:
Your Committee on Judiciary, to which was referred S.B. No. 198 entitled:
"A BILL FOR AN ACT RELATING TO TAXATION APPEALS,"
begs leave to report as follows:
The purpose of this measure is to clarify tax appeal procedures to delete requirements that the taxpayer first pay the amount of the assessed tax before filing an appeal to the tax appeal court.
Your Committee received testimony in support of this measure from the National Federation of Independent Business, Hawaii Society of Certified Public Accountants (CPAs), and Hawaii Association of Realtors. Testimony in opposition was received from the Department of Taxation (DOTAX).
Your Committee finds that current law requires the taxpayer to pay taxes assessed before appealing a tax assessment in many cases:
(1) A constitutional challenge to a tax law has to be decided by the tax appeal court. This requires the tax to be paid in order to appeal. On the one hand the constitutional challenge may result in the taxpayer winning and the tax paid returned. On the other hand, if the taxpayer loses, the State retains the taxes paid;
(2) A non-constitutional challenge involving statutory interpretation or applicability also has to be decided by the tax appeal court, which raises the same problem of requiring payment to take an appeal; and
(3) Act 199, Session Laws of Hawaii 2000, however, repealed the requirement that the assessed tax be paid as a precondition of appeal to the Board of Review, which has resulted, according to testimony of the CPAs, in an inordinate number of appeals to the Board which has caused the volunteer Board to become overwrought.
Your Committee believes that this measure would remedy the differences and allow all taxpayers to appeal their taxes without paying them first. Furthermore, DOTAX could not provide testimony on the number of appeals won by the State, nor the amount of taxes involved in those cases. Without any figures to judge the extent of the moneys involved, your Committee has decided to pass this measure to defer to the Committee on Ways and Means.
As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 198 and recommends that it pass Second Reading and be referred to the Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committee on Judiciary,
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____________________________ BRIAN KANNO, Chair |
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