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HOUSE OF REPRESENTATIVES |
H.B. NO. |
349 |
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TWENTY-NINTH LEGISLATURE, 2017 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to taxation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 46-16.8, Hawaii Revised Statutes, is amended by amending subsection (b) to read as follows:
"(b) Each county that has established a
surcharge on state tax prior to [[]July 1, 2015,[]] under
authority of subsection (a) may extend the surcharge [from] beyond
January 1, 2023, [until December 31, 2027,] at the [same] rates[.]
enumerated in sections 237-8.6 and 238-2.6. A county electing to extend
this surcharge shall do so by ordinance; provided that:
(1) No ordinance shall be adopted until the county has conducted a public hearing on the proposed ordinance; and
(2) The ordinance shall be adopted prior to July 1, 2016, but no earlier than July 1, 2015.
A county electing to exercise the authority granted under this subsection shall notify the director of taxation within ten days after the county has adopted an ordinance extending the surcharge on state tax. Beginning on January 1, 2023, the director of taxation shall levy, assess, collect, and otherwise administer the extended surcharge on state tax."
SECTION 2. Section 237-8.6, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) The county surcharge on state tax, upon the adoption of county ordinances and in accordance with the requirements of section 46-16.8, shall be levied, assessed, and collected as provided in this section on all gross proceeds and gross income taxable under this chapter. No county shall set the surcharge on state tax at a rate greater than:
(1) [one-half] 0.5 per cent if
prior to January 1, 2023; and
(2) 0.375 per cent if after December 31, 2022;
of all gross proceeds and gross income taxable under this chapter. All provisions of this chapter shall apply to the county surcharge on state tax. With respect to the surcharge, the director of taxation shall have all the rights and powers provided under this chapter. In addition, the director of taxation shall have the exclusive rights and power to determine the county or counties in which a person is engaged in business and, in the case of a person engaged in business in more than one county, the director shall determine, through apportionment or other means, that portion of the surcharge on state tax attributable to business conducted in each county.
(b) Each county surcharge on state tax that
may be adopted or extended pursuant to section 46-16.8 shall be levied
beginning in the taxable year after the adoption of the relevant county
ordinance; provided that no surcharge on state tax may be levied[:
(1) Prior] prior to:
[(A)] (1) January 1, 2007, if the
county surcharge on state tax was established by an ordinance adopted prior to
December 31, 2005; or
[(B)] (2) January 1, 2018, if the
county surcharge on state tax was established by the adoption of an ordinance
after June 30, 2015, but prior to July 1, 2016[; and
(2) After December 31, 2027]."
SECTION 3. Section 238-2.6, Hawaii Revised Statutes, is amended by amending subsections (a) and (b) to read as follows:
"(a) The county surcharge on state tax, upon the adoption of county ordinances and in accordance with the requirements of section 46-16.8, shall be levied, assessed, and collected as provided in this section on all gross proceeds and gross income taxable under this chapter. No county shall set the surcharge on state tax at a rate greater than:
(1) [one-half] 0.5 per cent if
prior to January 1, 2023; and
(2) 0.375 per cent if after December 31, 2022;
of all gross proceeds and gross income taxable under this chapter. All provisions of this chapter shall apply to the county surcharge on state tax. With respect to the surcharge, the director of taxation shall have all the rights and powers provided under this chapter. In addition, the director of taxation shall have the exclusive rights and power to determine the county or counties in which a person is engaged in business and, in the case of a person engaged in business in more than one county, the director shall determine, through apportionment or other means, that portion of the surcharge on state tax attributable to business conducted in each county.
(b) Each county surcharge on state tax that
may be adopted or extended shall be levied beginning in the taxable year after
the adoption of the relevant county ordinance; provided that no surcharge on
state tax may be levied[:
(1) Prior] prior to:
[(A)] (1) January 1, 2007, if the
county surcharge on state tax was established by an ordinance adopted prior to
December 31, 2005; or
[(B)] (2) January 1, 2018, if the
county surcharge on state tax was established by the adoption of an ordinance
after June 30, 2015, but prior to July 1, 2016[; and
(2) After December 31, 2027]."
SECTION 4. Section 248-2.6, Hawaii Revised Statutes, is amended as follows:
1. By amending subsection (a) to read:
"(a) If adopted by county ordinance, all
county surcharges on state tax collected by the director of taxation shall be
paid into the state treasury quarterly, within ten working days after
collection, and shall be placed by the director of finance in special
accounts. Out of the revenues generated by county surcharges on state tax paid
into each respective state treasury special account, the director of finance
shall deduct [ten per cent] the following percentage of the gross
proceeds of a respective county's surcharge on state tax to reimburse the State
for the costs of assessment, collection, and disposition of the county
surcharge on state tax incurred by the State[.]:
(1) Prior to January 1, 2018, ten per cent; and
(2) After December 31, 2017, five per cent.
Amounts retained shall be general fund realizations of the State."
2. By amending subsection (d) to read:
"(d) After the deduction and withholding
of the costs under subsections (a) and (b), the director of finance shall pay
the remaining balance on [[]a[]] quarterly basis to the director
of finance of each county that has adopted a county surcharge on state tax
under section 46-16.8. The quarterly payments shall be made after the county
surcharges on state tax have been paid into the state treasury special accounts
or after the disposition of any tax appeal, as the case may be. All county
surcharges on state tax collected shall be distributed by the director of
finance to the county in which the county surcharge on state tax is generated
and shall be a general fund realization of the county, to be used for the
purposes specified in section 46-16.8 by each of the counties[.];
provided that no county surcharges on state tax collected shall be distributed
to a county, pursuant to this subsection, unless the county in which the county
surcharge on state tax is generated provides matching funds in an amount equal
to twenty-five per cent of the county surcharges to be distributed (i.e., for
every $3 in county surcharges to be distributed, the county shall provide
matching funds of $1); and provided further that a county's matching funds
shall not consist of any county surcharges on state tax distributed to that
county under this section."
SECTION 5. Act 247, Session Laws of Hawaii 2005, as amended by Act 240, Session Laws of Hawaii 2015, is amended by amending section 9 to read as follows:
"SECTION 9. This Act shall take effect upon its approval; provided that:
(1) If none of the counties of the State adopt an ordinance to levy a county surcharge on state tax by December 31, 2005, this Act shall be repealed and section 437D-8.4, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day prior to the effective date of this Act;
(2) If any county does not adopt an ordinance to levy a county surcharge on state tax by December 31, 2005, it shall be prohibited from adopting such an ordinance pursuant to this Act, unless otherwise authorized by the legislature through a separate legislative act; and
(3) If an ordinance to levy a county surcharge on
state tax is adopted by December 31, 2005[:
(A) The], the ordinance
shall be repealed on December 31, 2022; provided that the repeal of the
ordinance shall not affect the validity or effect of an ordinance to extend a
surcharge on state tax adopted pursuant to Act 240, Session Laws of Hawaii 2015[;
(B) This Act shall be repealed on
December 31, 2027; and
(C) Section 437D-8.4, Hawaii Revised
Statutes, shall be reenacted in the form in which it read on the day prior to
the effective date of this Act; provided that the amendments made to section 437D-8.4,
Hawaii Revised Statutes, by Act 226, Session Laws of Hawaii 2008, as amended by
Act 11, Session Laws of Hawaii 2009, and Act 110, Session Laws of Hawaii 2014,
shall not be repealed]."
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 2017.
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INTRODUCED BY: |
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Report Title:
County Surcharge on State Tax
Description:
Authorizes a county that has established a county surcharge on state tax to make the surcharge permanent. Reduces the rate of the surcharge from 0.5% to 0.375% after 12/31/22. Reduces the amount deducted from the county surcharge on state tax to reimburse the State for costs of assessment, collection, and disposition from 10% to 5%. Requires counties to provide matching funds in order to receive surcharge proceeds.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.