Requires owner-builders to file an information return within 30 days after the completion of their projects to improve tax collections for construction-related improvements.

A BILL FOR AN ACT

SECTION 1. The legislature finds that tax compliance by certain persons providing contracting, services, and property to owner-builders is an on-going problem that has not been adequately addressed by the State. This situation has not only fostered a disrespect for the state tax system by contractors and other construction-related professions that pay their fair share of taxes, but has also resulted in millions of dollars in uncollected taxes owed and due to the State.

This Act provides a reasonable solution to this problem by requiring owner-builders to file an information return within thirty days after the completion of their project. The return would provide the State with the necessary information to improve tax collection and to level the playing field for all contractors and construction-related professions in the State.

SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237-   Filing of an information return; owner-builders. (a) Every person who claims an exemption from the tax imposed under section 237-13(3) pursuant to section 237-13(3)(D), or who claims to be an owner-builder under section 444-2(7), shall file an information return on forms prescribed by the department for improvements that are issued building permits with a value of $          or greater.

(b) The information return shall be filed with the department no later than thirty calendar days after the actual completion of the improvements.

(c) This section shall not apply to the department of Hawaiian home lands and Hawaii public housing administration."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 2006, and shall apply to improvements contracted for on or after January 1, 2007.