Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Tourism, to which was referred S.B. No. 1863 entitled:

begs leave to report as follows:

The purpose of this measure is to require the Department of Taxation to review the forms and process relating to the collection of the transient accommodations tax from vacation rentals and bed and breakfast establishments and require the department to report the transient accommodations tax revenues received from these types of establishments.

Your Committee received testimony in support of the measure from a member of the Maui County Council. Testimony in opposition to the measure was received from the Department of Taxation. Comments on this measure were submitted by the Department of Business, Economic Development, and Tourism and the Tax Foundation of Hawaii.

Your Committee finds that the State needs a reporting system with respect to transient accommodations tax revenues collected from residential properties owners who operate vacation rentals and bed and breakfast establishments. Thus, your Committee believes that better reporting will enable the State to provide a more comprehensive tax system that is more equitable and cost effective.

Your Committee has amended the bill by making technical, nonsubstantive amendments.

As affirmed by the record of votes of the members of your Committee on Tourism that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1863, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1863, S.D. 1, and be referred to the Committee on Ways and Means.