Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 97 entitled:

begs leave to report as follows:

The purpose of this measure is to replace the current standard deduction amount for state income tax purposes with an unspecified amount.

Your Committee finds that it has been more than twenty years since the standard deduction has been modified and taxpayers in Hawaii are long overdue for an adjustment to the state standard deduction. An increase in the standard deduction enhances fairness in the state income tax, providing moderate tax relief for low income families and taxpayers who do not itemize on their income tax returns.

Your Committee has amended this measure by making a technical nonsubstantive amendment for the purposes of clarity and style.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 97, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 97, S.D. 1, and be placed on the calendar for Third Reading.