Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 1389, H.D. 1, entitled:

begs leave to report as follows:

The purpose of this bill is to extend the current general excise tax (GET) exemption for amounts received by hotel operators from the owner of a hotel, which are disbursed for employee wages, salaries, payroll taxes, insurance premiums, and benefits. The bill would extend the exemption to:

The bill also extends the GET exemption for amounts received by the manager or board of directors of an association of apartment owners or nonprofit homeowners or community association, in reimbursement of sums paid for common expenses, to include amounts received and so expended by an association submanager.

Your Committee received testimony in support of this measure from Outrigger Hotels. Testimony in opposition of this measure was received from the Department of Taxation.

Your Committee finds that this measure provides equitable tax treatment for submanagers of certain residential property association and for operators and suboperators of hotels and timeshares.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1389, H.D. 1, and recommends that it be referred to the Committee on Finance.