Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2002

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 2720, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to require owners of vehicles purchased out-of-State to prove payment of use taxes prior to being issued a certificate of motor vehicle registration.

Testimony supporting this measure was submitted by the Department of Taxation, City and County of Honolulu Department of Customer Services, Hawaii Automobile Dealers' Association, and Soderholm Sales & Leasing, Inc. Comments were received from the Tax Foundation of Hawaii.

Your Committee finds that the use tax laws ensure that Hawaii's businesses and residents conducting transactions solely within the State are fairly taxed when compared to businesses and residents that import goods and services. This measure specifically addresses the importation of motor vehicles and ensures the appropriate and equitable administration of taxes on those applicable transactions.

Your Committee has amended this measure by making its provisions effective on January 1, 2005 in order to continue discussion of the bill.

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 H.B. No. 2720, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2720, H.D. 1, S.D. 1, and be placed on the calendar for Third Reading.