Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 840 entitled:

begs leave to report as follows:

The purpose of this measure is to clarify the income tax withholding requirements for an employer with an annual withholding tax liability in excess of $40,000.

The measure also provides a sufficient number of banking days to remit the withholding to the State and requires that all income tax withholding returns be filed with the Director of Taxation in the First Taxation District, rather than in the taxation district in which the employer has the employer's principal place of business.

Your Committee finds that the measure clarifies that the filing of an income tax withholding return and the remission of the complete amount of tax withheld for an employer with an annual withholding tax liability in excess of $40,000 shall be done on a semi-weekly basis. The measure also provides that if the semi-weekly filing deadline falls on a nonbanking day, the taxpayer will have an additional three banking days beyond the semi-weekly filing deadline to file the return and remit the taxes withheld.

Your Committee has amended the measure by deleting the requirement that the measure apply retroactively to January 1, 2005, and by making technical, nonsubstantive amendments for the purposes of clarity and 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. 840, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 840, S.D. 1, and be placed on the calendar for Third Reading.