STAND. COM. REP. NO. 468

Honolulu, Hawaii

RE:    S.B. No. 948

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 948 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

     The purpose and intent of this measure is to implement Hawaii's participation in the national Streamlined Sales and Use Tax Agreement by:

     (1)  Amending Hawaii's tax laws to allow the State to participate in the national Streamlined Sales and Use Tax Agreement; and

     (2)  Creating a committee to oversee the Department of Taxation's implementation and administration of, and compliance with, the Streamlined Sales and Use Tax Agreement.

     Your Committee received testimony in support of this measure from the Retail Merchants of Hawaii, Walgreens Co., Hawaii Association of Realtors, Hawaii Appleseed Center for Law and Economic Justice, and Chamber of Commerce of Hawaii.

     Your Committee received testimony in opposition to this measure from the Department of Taxation, and one individual.

     Your Committee received comments on this measure from the Tax Foundation of Hawaii.

     Your Committee finds that this measure allows the State to collect taxes on the sale of goods and services conducted via the Internet without placing additional burdens on interstate commerce, thereby "leveling the playing field" between local and out-of-state retailers.  Your Committee also finds that the State's participation in the Streamlined Sales and Use Tax Agreement has the potential to achieve more efficient sales, excise, and use tax administration between participating states, as well as improved tax compliance by interstate vendors.

     Your Committee has amended this measure by:

     (1)  Amending the effective date to July 1, 2050, to promote further discussion of the measure; and

     (2)  Making technical nonsubstantive amendments for clarity, consistency, 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 is in accord with the intent and purpose of S.B. No. 948, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 948, S.D. 1, and be placed on the calendar for Third Reading.

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

____________________________

DAVID Y. IGE, Chair