STAND. COM. REP. NO.  386

Honolulu, Hawaii

                , 2015

RE:   H.B. No. 1327

      H.D. 1

Honorable Joseph M. Souki

Speaker, House of Representatives

Twenty-Eighth State Legislature

Regular Session of 2015

State of Hawaii

Sir:

     Your Committee on Tourism, to which was referred H.B. No. 1327 entitled:

"A BILL FOR AN ACT RELATING TO REAL PROPERTY,"

begs leave to report as follows:

The purpose of this measure is to permit a taxpayer that provides transient accommodations on real property leased from a related entity to claim a general excise tax deduction from the amount of gross proceeds or gross income received from providing the transient accommodations.

Host Hotels & Resorts, L.P., supported this measure.  The Department of Taxation and Tax Foundation of Hawaii offered comments.

     Your Committee notes the concerns of the Department of Taxation which stated that the proposed general excise tax deduction for specific taxpayers would be difficult to administer, run the risk of violating consumer protection law, and create an uneven playing field for similarly situated taxpayers who engage in the business of furnishing transient accommodations.  Although your Committee acknowledges these concerns, your Committee recommends that this measure proceed through the legislative process to facilitate further discussion.

     Your Committee has amended this measure by changing its effective date to July 1, 2020, to promote further discussion.

     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. 1327, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1327, 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