STAND. COM. REP. NO. 1717

Honolulu, Hawaii

RE:    H.C.R. No. 31

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2017

State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred H.C.R. No. 31 entitled:

"HOUSE CONCURRENT RESOLUTION REQUESTING THE DEPARTMENT OF TAXATION TO ADOPT RULES TO REQUIRE THAT ANY ASSESSMENT OF PENALTY OR INTEREST ON TAXES BE ACCOMPANIED BY AN EXPLANATION, INCLUDING CALCULATIONS, OF HOW THE AMOUNT OF THE PENALTY OR INTEREST WAS DETERMINED,"

begs leave to report as follows:

     The purpose and intent of this measure is to request the Department of Taxation to adopt rules to require that any assessment of penalty or interest on taxes be accompanied by an explanation, including calculations, of how the amount of the penalty or interest was determined.

     Your Committee received testimony in support of this measure from one individual.

     Your Committee received comments on this measure from the Department of Taxation.

     Your Committee finds that pursuant to section 231-39, Hawaii Revised Statutes, the Department of Taxation assesses penalties and interest on taxpayers who fail to file a required return, fail to make required tax payments, or underpay their taxes.  Although the department currently provides to each taxpayer who is assessed a penalty or interest a statement that sets out the amount of the penalty or interest, the statement generally does not include any explanatory language or supporting calculations.  As a result, the taxpayer is often left with little understanding of how the department determined the amount of the penalty or interest being assessed.  Thus, your Committee believes that the Department of Taxation should adopt rules to require that any assessment of penalty or interest on taxes be accompanied by an explanation.

     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 concurs with the intent and purpose of H.C.R. No. 31, and recommends its adoption.

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

________________________________

JILL N. TOKUDA, Chair