STAND. COM. REP. NO.2674
Honolulu, Hawaii
, 2002
RE: S.B. No. 2826
S.D. 1
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 S.B. No. 2826 entitled:
"A BILL FOR AN ACT RELATING TO THE COLLECTION OF TAXES,"
begs leave to report as follows:
The purposes of this measure are to:
(1) Expand the Department of Taxation's current authority to ascertain the true value of sales of products between affiliated companies or persons when the consideration paid is not indicative of the true value to sales of services and all taxes administered under title 14, Hawaii Revised Statutes;
(2) Provide a continuous levy on the salary or wages of a delinquent taxpayer;
(3) Indemnify a person from third parties when the person honors a state tax levy; and
(4) Expand the authority for recovering unpaid withholding taxes.
Testimony in support of this measure was received from the Department of Taxation (Department). The Tax Foundation of Hawaii submitted comments.
Your Committee finds that under current law the Department is hampered in its collection of taxes by limitations on its authority in the specific instances outlined in the purpose section of this Act.
Your Committee is in agreement with the enhanced authority, which will allow the Department to collect taxes owed to the State. Your Committee has amended this measure to provide for the "fair market value" rather than "true value" of sale between affiliated companies or persons, since, according to the Department, "fair market value" is used in accounting and tax practice while "true value" is subject to interpretation. Your Committee further amended this measure to define "affiliated companies or persons", and to make technical, nonsubstantive amendments to conform to preferred drafting style.
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 S.B. No. 2826, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2826, S.D. 1, and be placed on the calendar for Third Reading.
Respectfully submitted on behalf of the members of the Committee on Ways and Means,
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____________________________ BRIAN T. TANIGUCHI, Chair |
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