STAND. COM. REP. NO. 1226

Honolulu, Hawaii

RE:    H.B. No. 1404

       H.D. 1

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2009

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred H.B. No. 1404, H.D. 1, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO GENERAL EXCISE TAX,"

begs leave to report as follows:

     The purpose of this measure is to repeal the sunset date on the general excise tax exemption on moneys paid by a timeshare association to a hotel operator for employee wages, salaries, payroll taxes, insurance premiums, and benefits.

     Your Committee received three written comments on this measure.  The written comments may be reviewed on the Legislature's website.

     Act 239, Session Laws of Hawaii 2007, provided timeshare associations, as defined in section 514E-1, Hawaii Revised Statutes, an exemption from the general excise tax imposed by chapter 237, Hawaii Revised Statutes, the same as extended to other hotel owners, on the payment of moneys to a hotel operator for employee wages, salaries, payroll taxes, insurance premiums, and benefits, including retirement, vacation, sick pay, and health benefits.  However, this exemption for timeshare associations was to sunset on December 31, 2009.  Your Committee finds that, in all fairness, timeshare associations should be afforded the same exemption that is provided for other hotel owners for moneys paid to a hotel operator for various employee expenses.

     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 H.B. No. 1404, H.D. 1, S.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

____________________________

DONNA MERCADO KIM, Chair