STAND. COM. REP. NO.  391-14

Honolulu, Hawaii

                , 2014

RE:   H.B. No. 1594

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Sir:

     Your Committee on Tourism, to which was referred H.B. No. 1594 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose of this measure is to support Hawaii's construction industry by creating a 10 percent tax credit for construction or renovation costs incurred on a qualified hotel facility before December 31, 2019.

The Subcontractors Association of Hawaii, Wyndham Vacation Ownership, Hawaii Lodging & Tourism Association, and the Maui Hotel & Lodging Association supported this measure.  The Department of Taxation and the Tax Foundation of Hawaii offered comments on this measure.  

     Your Committee has amended this measure by:

     (1)  Clarifying that the tax credit created by this measure applies to taxable years beginning from January 1, 2015, through December 31, 2019;

     (2)  Clarifying that a qualified taxpayer for the purposes of claiming the credit need not be subject to the transient accommodations tax; and

     (3)  Requiring all construction costs for which the tax credit is intended to be claimed to be pre-certified by the Department of Business, Economic Development, and Tourism prior to incurring the costs to ensure compliance with the type of activity intended to be covered by the tax credit.

     As affirmed by the record of votes of the members of your Committee on Tourism that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1594, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1594, H.D. 1, and be referred to the Committee on Finance.

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

____________________________

TOM BROWER, Chair