STAND. COM. REP. NO. 2068

Honolulu, Hawaii

RE:    S.B. No. 2704

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committee on Public Safety, Intergovernmental, and Military Affairs, to which was referred S.B. No. 2704 entitled:

"A BILL FOR AN ACT RELATING TO TAXABLE INCOME EXCLUSION,"

begs leave to report as follows:

     The purpose and intent of this measure is to provide an income tax exclusion for resident taxpayers who are on active military duty who are serving outside the State pursuant to orders.

     Your Committee received testimony in support of this measure from the Department of Defense.  Your Committee received testimony in opposition to this measure from one individual.  Your Committee received comments on this measure from the Department of Taxation and Tax Foundation of Hawaii.

     Your Committee finds that military personnel on active duty frequently face financial hardships arising from obligations arising in the State while they are deployed outside the State, including the possibility of owing state income tax in multiple states simultaneously.  This places an unnecessary burden on individuals who are already called upon to make significant sacrifices in service to the nation.  Your Committee further finds that this measure will help to alleviate that unnecessary burden.

     Your Committee has amended this measure by:

     (1)  Incorporating language suggested by the Hawaii Department of Taxation; and

     (2)  Making technical amendments to correctly reflect the language in the Hawaii Revised Statutes.

     As affirmed by the record of votes of the members of your Committee on Public Safety, Intergovernmental, and Military Affairs that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2704, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2704, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Public Safety, Intergovernmental, and Military Affairs,

________________________________

CLARENCE K. NISHIHARA, Chair