SB314.DOC

THE SENATE	S.B. NO.	314
TWENTY-FIFTH LEGISLATURE, 2009
STATE OF HAWAII

A BILL FOR AN ACT

relating to a general excise tax holiday.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The Legislature recognizes that Hawaii taxpayers are some of the most overburdened taxpayers in the nation. The Legislature further recognizes that the State levies a general excise tax on businesses, rather than a state sales tax on consumers. Currently, several states, including Alabama, Connecticut, Florida, Georgia, Iowa, Louisiana, Missouri, North Carolina, Tennessee, Texas, and Virginia have temporary state sales tax holidays. These state sales tax holidays have been extremely successful in increasing sales and driving new purchases that would not otherwise be made. The purpose of this Act is to create an incentive to stimulate consumer spending within our economy by authorizing a state general excise tax holiday for goods and services sold in the State on the condition that businesses pass the savings on to consumers. While the Legislature recognizes that a state general excise tax holiday creates the illusion of a shortfall in general fund revenues, we emphasize that government is in the process of being trimmed and streamlined because of the hard work and dedication of this Administration to maintain fiscal responsibility. A general excise tax holiday, coupled with reductions in government spending, would allow for the citizens of this State to retain more of their money to spend in more beneficial ways. Thus, the Legislature recognizes that it is appropriate at this time to return money to the people of Hawaii that would otherwise be spent on a bloated, centralized government. A tax holiday would have the effect of stimulating retail sales and giving a further boost to our recovering economy. A general excise tax holiday in Hawaii would help both consumers and retailers alike.

SECTION 2. Chapter 237, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§237- Annual tax holiday. (a) Notwithstanding any law to the contrary, taxes under this chapter shall not be due on the sale of retail goods and services, if the sale takes place during the following periods:

(1) Beginning at 12:01 a.m. on the first Friday in June 2009 and ending at 12 midnight of the Sunday immediately following;

(2) Beginning at 12:01 a.m. on the first Friday in September 2009 and ending at 12 midnight of the Sunday immediately following;

(3) Beginning at 12:01 a.m. on the first Friday in December 2009 and ending at 12 midnight of the Sunday immediately following;

(4) Beginning at 12:01 a.m. on the first Friday in March 2010 and ending at 12 midnight of the Sunday immediately following;

provided that all savings generated by this section shall be passed on by the seller to the purchaser without any increase in price. This exemption shall apply to the sale of retail goods and services only and not to sales on items that will be resold in any manner.

(b) The exemption provided in this section shall not apply to:

(1) Rebates, layaway sales, rain checks, or exchanges when the transactions occur before or after the tax holiday period; and

(2) Mail, telephone, e-mail, or internet orders with businesses operating outside the state of Hawaii.

(c) Articles that are normally sold as a unit shall continue to be sold in that manner and shall not be priced separately and sold as individual items to obtain the exemption.

(d) Shipping and handling charges shall be included as part of the sales price of the item.

(e) The retailer shall not be required to obtain any special license, permit, or other documentation of sales during the exemption holiday period; provided that the retailer's records shall clearly identify the type of item sold, the date the item was sold, and the sales price of the item."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:	_____________________________