STAND

STAND. COM. REP. NO. 1548

Honolulu, Hawaii

, 2005

RE: S.B. No. 1740

S.D. 1

H.D. 1

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Finance, to which was referred S.B. No. 1740, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO ADJUSTING THE INCOME TAX BRACKETS,"

begs leave to report as follows:

The purpose of this bill is to provide income tax relief for low- and middle-income families by:

(1) Eliminating the two lowest income tax brackets; and

(2) Adding a new tax bracket before the top rate applies.

Your Committee finds that under this bill:

(1) For surviving spouses and those filing joint returns:

(A) Their taxable income begins at $8,000 rather than $4,000;

(B) A new tax bracket (over $80,000 but not over $100,000) is added; and

and

(2) For heads of households:

(A) Their taxable income begins at $6,000 rather than at $3,000;

(B) A new tax bracket (over $60,000 but not over $80,000) is added; and

The Department of Taxation supported the intent of this bill. The Tax Foundation of Hawaii offered comments.

Your Committee has amended this bill by:

(1) Changing the effective date to July 1, 2010, to encourage continued discussion; and

(2) Making technical, nonsubstantive amendments for clarity.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1740, S.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1740, S.D. 1, H.D. 1, and be placed on the calendar for Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

		____________________________ DWIGHT TAKAMINE, Chair