Repeals increase in the rental motor vehicle surcharge tax levied between September 1, 1999 and August 31, 2007.

A BILL FOR AN ACT

SECTION 1. The legislature finds that there was a significant increase in revenues to the state general fund in 2005. This increase is expected to continue through 2007 and probably longer in view of Hawaii's positive tourism outlook.

In light of a healthy general fund along with significant increases in revenues to the state highway fund, the legislature finds that it is fair and appropriate to reduce the rental motor vehicle surcharge tax.

Enacted by Act 263, Session Laws of Hawaii 1991, the rental motor vehicle surcharge tax was originally $2 per day. Act 223, Session Laws of Hawaii 1999, temporarily raised this tax to $3 per day for the period from September 1, 1999, to August 31, 2007.

The legislature further finds that the $3 daily surcharge tax on rental motor vehicles 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 per day.

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 if:

SECTION 3. Statutory material to be repealed is bracketed and stricken.

SECTION 4. This Act shall take effect on July 1, 2006.