Report Title:
Rental Motor Vehicle Surcharge Tax
Description:
Repeals the increase in the rental motor vehicle surcharge tax levied between September 1, 1999 and August 31, 2007. (SD1)
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
390 |
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TWENTY-THIRD LEGISLATURE, 2005 |
H.D. 1 |
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STATE OF HAWAII |
S.D. 1 |
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A BILL FOR AN ACT
RELATING TO RENTAL MOTOR VEHICLE SURCHARGE TAX.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that there has been a significant increase in revenues to the state general fund. This increase is expected to continue through 2007 and probably longer in view of Hawaii's positive tourism outlook.
According to the governor's press release dated December 20, 2004, on her proposed biennium executive budget:
"The budget was developed as the state is enjoying a robust economy and moderate revenue growth,.... The general fund operating budget is proposed to grow by $444 million (11 percent) in FY06 and $561 million (14.2 percent) in FY07."
In light of a healthy general fund, the legislature finds that it is fair and appropriate to reduce the rental motor vehicle surcharge tax on the rental motor vehicle industry.
Enacted by Act 263, Session Laws of Hawaii 1991, the tax was originally $2 per day. Act 223, Session Laws of Hawaii 1999, temporarily raised the tax to $3 per day for the period from September 1, 1999, to August 31, 2007, except for renters whose own vehicles are being repaired. The purpose of the increase in 1999 was to temporarily help bolster a lagging general fund. However, no other industry has similarly been assessed and has had to endure such a tax increase to strengthen the general fund.
Therefore, in fairness to the motor vehicle rental industry and some of its members who have recently experienced bankruptcy, it is only fair and appropriate to immediately reduce the $3 tax to $2. The legislature further finds that the $3 tax does not help Hawaii's competitive image as a fair and attractive tourist destination.
The purpose of this Act is to reduce the $3 per day rental motor vehicle surcharge tax to $2.
SECTION 2. Section 251-2, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) There is levied and shall be assessed and collected each month a rental motor vehicle surcharge tax of $2 a day[, except that for the period of September 1, 1999, to August 31, 2007, the tax shall be $3 a day,] or any portion of a day that a rental motor vehicle is rented or leased. The rental motor vehicle surcharge tax shall be levied upon the lessor; provided that the tax shall not be levied on the lessor [during the period September 1, 1999, to August 31, 2007,] if:
(1) The lessor is renting the vehicle to replace a vehicle of the lessee that is being repaired; and
(2) The repair order for the vehicle is retained by the lessor for four years for verification purposes."
SECTION 3. Statutory material to be repealed is bracketed and stricken.
SECTION 4. This Act shall take effect on July 1, 2050.