Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 2499, S.D. 2, entitled:

begs leave to report as follows:

The purpose of this bill is to provide to investment securities brokers and agents, the same relief from the pyramiding of the general excise tax (GET) now enjoyed by most persons engaging in wholesale service transactions, by providing that when commissions earned on securities sales transactions are divided between several persons, each person is responsible only for the GET on their own portion of the commission.

Linsco/Private Ledger Corp., Brookstreet Securities Corporation, Sunamerica Securities Inc., and a concerned individual submitted testimony supporting this bill. The Department of Taxation opposed this bill. The Tax Foundation of Hawaii commented on this measure.

Your Committee has amended this bill:

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 S.B. No. 2499, S.D. 2, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2499, S.D. 2, H.D. 1, and be referred to the Committee on Finance.