STAND. COM. REP. NO. 38

Honolulu, Hawaii

RE:    S.B. No. 194

       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 Judiciary and Government Operations, to which was referred S.B. No. 194 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose of this measure is to:

     (1)  Require a tax refund to be direct deposited in the taxpayer's account if the taxpayer so desires;

     (2)  Prohibit deposit of a taxpayer-client's refund into a paid tax preparer's account;

     (3)  Require a paid tax preparer to sign a return prepared by the paid tax preparer; and

     (4)  Establish penalties if a paid tax preparer violates provisions of the measure.

     Your Committee received testimony in support of this measure from the Department of Taxation.

     The intent of this measure is to prohibit a paid tax preparer from designating the preparer's own personal account or business account as the account into which a client's refund should be deposited.

     Your Committee has amended this measure by changing the effective date to July 1, 2050, to facilitate continuing discussions on this matter.

     As affirmed by the record of votes of the members of your Committee on Judiciary and Government Operations that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 194, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 194, S.D. 1, and be referred to the Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Judiciary and Government Operations,

____________________________

BRIAN T. TANIGUCHI, Chair