STAND. COM. REP. NO.1410
Honolulu, Hawaii
, 2003
RE: H.B. No. 1554
H.D. 1
S.D. 2
Honorable Robert Bunda
President of the Senate
Twenty-Second State Legislature
Regular Session of 2003
State of Hawaii
Sir:
Your Committee on Ways and Means, to which was referred H.B. No. 1554, H.D. 1, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO COUNTY TAXES,"
begs leave to report as follows:
The purpose of this measure is to permit counties with a population of two hundred thousand or more to impose a retail sales tax on tangible personal property in an amount not to exceed one per cent.
The bill further provides that if the city and county of Honolulu, the only county with a population exceeding two hundred thousand, does adopt the tax, this tax will replace its share of the transient accommodations tax.
Currently, the counties are dependent on receiving state funds, as the counties' only consistent independent source of revenue is the real property tax, which does not suffice to cover all the services the counties provide. However, continually raising the real property tax unduly burdens real property owners. Your Committee believes that it would be more equitable to authorize a county-level tax that applies more broadly.
Your Committee also finds that all counties, not just Honolulu, grapple with the issue of finding sufficient revenue to maintain basic health and safety services, as well as preserving and enhancing the quality of life for our residents.
Your Committee has amended the bill by:
(1) Allowing each county to adopt the retail sales tax;
(2) Setting the tax at a uniform rate of one per cent. A uniform rate will make Hawaii's entry into the national Streamlined Sales Tax Project substantially simpler;
(3) Setting a timetable by which counties must adopt the tax to take advantage of the legislation: before August 1, 2003, for a county with a population of two hundred thousand or more, and by October 1, 2003, for counties with a smaller population;
(4) Changing the percentage of the transient accommodations tax that the counties, other than the city and county of Honolulu, would receive if the city and county of Honolulu adopts the tax as follows: 16.0 per cent for Kauai county, 20.0 per cent for Hawaii county, and 24.0 per cent for Maui county; and
(5) Changing the effective date to July 1, 2020, for the purposes of promoting further discussion.
Your Committee realizes that, under this formula, the neighbor island counties' share of the transient accommodations tax is reduced if they and the city and county of Honolulu adopt the retail sales tax, whereas it is not reduced if they adopt the tax but the city and county does not. Your Committee believes this provision needs further discussion and therefore is leaving the provision for further consideration. Your Committee will continue to look at alternative formulas in the event that Honolulu does not adopt the tax, but other counties do.
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. 1554, H.D. 1, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1554, H.D. 1, S.D. 2.
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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