STAND. COM. REP. NO. 3102

Honolulu, Hawaii

RE:    S.C.R. No. 234

       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.C.R. No. 234 entitled:

"SENATE CONCURRENT RESOLUTION REQUESTING THE STATE ATTORNEY GENERAL TO INVESTIGATE WHETHER TRANSIENT ACCOMMODATIONS AND GENERAL EXCISE TAXES ON THE INTERNET SALE OF HOTEL ROOM ACCOMMODATIONS ARE BEING ASSESSED, COLLECTED, AND REMITTED TO THE STATE AND TO TAKE APPROPRIATE LEGAL ACTION, AS NECESSARY,"

begs leave to report as follows:

     The purpose of this measure is to request the Attorney General to investigate whether transient accommodations and general excise taxes on the internet sale of hotel room accommodations are being assessed, collected, and remitted to the State and to take appropriate legal action as necessary.

     Your Committee finds that internet travel services, such as Expedia and Orbitz offer competitive travel rates and ease of purchase for travelers worldwide.  These services include package rates for travel, lodging, and other amenities that are paid for online and not upon arrival at a destination.  If these sales were conducted in the State or by travel agents, the transient accommodations tax and the general excise tax would have been assessed and collected.  It is unclear whether internet travel service providers are collecting and remitting the applicable transient accommodations tax and the general excise tax to the State.

     Revenues from the transient accommodations tax and the general excise tax support not only the activities of Hawaii's visitor industry, but provide critical financial support to the four counties, especially during the current economic crisis.

     Your Committee therefore finds that it is justified and appropriate to request the Attorney General to investigate, take appropriate legal action, and to report to the Legislature on whether the transient accommodations tax and the general excise tax on the internet sale of transient accommodations are being assessed, collected, and remitted to the State.

     Your Committee has amended the measure by:

     (1)  Changing the title and "Be it Resolved" clause to clarify that the scope of the Attorney General's investigation is to include all transient accommodations that are subject to the transient accommodations tax and the general excise tax; and

     (2)  Making technical nonsubstantive changes 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 concurs with the intent and purpose of S.C.R. No. 234, as amended herein, and recommends its adoption in the form attached hereto as S.C.R. No. 234, S.D. 1.

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

____________________________

DONNA MERCADO KIM, Chair