HB1720 HD1

Report Title:

GET Exemptions/Exclusions; DoTax/DBEDT Biennial Review & Report

Description:

Requires the Tax Review Commission appointed on or before July 1, 2005, to conduct a review, quantifying and reporting the exemptions and exclusions from the general excise tax and recommending whether their benefits justify their costs. (HB1720 HD1)

HOUSE OF REPRESENTATIVES	H.B. NO.	1720
TWENTY-THIRD LEGISLATURE, 2005		H.D. 1
STATE OF HAWAII

A BILL FOR AN ACT

relating to the general excise tax.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that, over the years, the State has seen the creation and implementation of a plethora of exemptions and exclusions from the general excise tax. These exemptions and exclusions were created for a variety of reasons, including stimulating economic growth, assisting local businesses, creating new jobs, or other activities that benefit the State. However, some of these exemptions and exclusions have been in effect for decades with no apparent logical justification or little or no benefit to the State. The legislature finds that a review of all exemptions and exclusions from the general excise tax is essential to providing the most cost-effective and efficient use of taxpayer dollars. Because the State has never conducted a systematic review of these exemptions and exclusions from the general excise tax, this review is necessary to ensure that the original justifications still apply.

The purpose of this Act is to require a review of exemptions and exclusions to the general excise tax granted to certain taxpayers.

SECTION 2. Chapter 232E, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§232E- Exemptions and exclusions to imposition of general excise tax; review; report. (a) The commission appointed on or before July 1, 2005, pursuant to section 232E-2, shall conduct a review of statutory exemptions and exclusions to the imposition of the general excise tax for certain taxpayers. The commission shall review all the exemptions and exclusions in the following statutes:

(1) Section 237-23

(2) Section 237-23.5;

(3) Section 237-24;

(4) Section 237-24.3;

(5) Section 237-24.5;

(6) Section 237-24.7;

(7) Section 237-24.75;

(8) Section 237-24.8;

(9) Section 237-24.9;

(10) Section 237-25;

(11) Section 237-26;

(12) Section 237-27;

(13) Section 237-27.1;

(14) Section 237-27.5;

(15) Section 237-27.6;

(16) Section 237-28.1;

(17) Section 237-29;

(18) Section 237-29.5;

(19) Section 237-29.53;

(20) Section 237-29.55;

(21) Section 237-29.65;

(22) Section 237-29.7;

(23) Section 237-29.75; and

(24) Section 237-29.8.

(b) The commission shall complete its review and submit to the governor and the legislature:

(1) A preliminary report detailing its progress no later than twenty days prior to the convening of the regular session of 2006; and

(2) A final report no later than twenty days prior to the convening of the regular session of 2007.

(1) Quantify the total dollar amount of exemptions and exclusions granted for each category reviewed and broken down by:

(A) Specific category of taxpayers exempted or excluded; and

(B) Specific companies or individuals exempted or excluded;

and

(2) Recommend for each category reviewed, whether the exemptions and exclusions created benefits that justify the cost."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.