STAND. COM. REP. NO.  857-12

Honolulu, Hawaii

                , 2012

RE:   H.B. No. 1695

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Sixth State Legislature

Regular Session of 2012

State of Hawaii

Sir:

     Your Committee on Finance, to which was referred H.B. No. 1695 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose of this measure is to incorporate the anti-stacking fairness provisions included in the federal Internal Revenue Code by prohibiting penalties for:

     (1)  Failure to collect and pay taxes;

     (2)  Substantial understatements or misstatements on tax returns; and

     (3)  Erroneous claims for refund or credit on tax returns

from being added to tax underpayments on which certain other

penalties are already imposed.

Chun, Kerr, Dodd, Beaman & Wong, a Limited Liability Law Partnership and an individual supported this measure.  Tax Foundation of Hawaii provided comments on this measure.

     As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1695 and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

____________________________

MARCUS R. OSHIRO, Chair