STAND. COM. REP. NO. 2401

Honolulu, Hawaii

RE:    S.B. No. 2643

       S.D. 1

Honorable Colleen Hanabusa

President of the Senate

Twenty-Fifth State Legislature

Regular Session of 2010

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 2643, 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 of (and thereby make permanent) a law that provides an excise tax exemption for amounts received by a submanager of a condominium association of apartment owner under chapter 514A, Hawaii Revised Statutes.

     The measure also repeals the sunset date of a law that provides an excise tax exemption for amounts received as employee wages and benefits by an operator of a hotel from a timeshare association and amounts received by the suboperator of a hotel from the owner of the hotel, timeshare association, or the operator of a hotel.

Your Committee received written comments in support of this measure from Marriott Vacation Club and Outrigger Hotels.  The Tax Foundation of Hawaii submitted comments on this measure.  The written comments may be reviewed on the Legislature’s website.

Your Committee finds that making these tax exemptions permanent will not only clarify the general excise tax law but will also remove disincentives for owners to pay higher wages, provide higher levels of employee benefits, and employ the services of local operators and vendors.

     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. 2643, 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