STAND. COM. REP. NO. 1611

Honolulu, Hawaii

, 2019

RE: S.B. No. 1158

S.D. 2

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirtieth State Legislature

Regular Session of 2019

State of Hawaii

Sir:

Your Committees on Economic Development & Business and Lower & Higher Education, to which was referred S.B. No. 1158, S.D. 2, entitled:

"A BILL FOR AN ACT RELATING TO SCHOOL SUPPLIES,"

beg leave to report as follows:

The purpose of this measure is to establish a general excise tax holiday for consumers and businesses for school supplies sold during the weekend beginning with the last Friday in July; provided that businesses pass the savings on to consumers.

The Hawaii State Teachers Association and Retail Merchants of Hawaii testified in support of this measure. The Department of Taxation, Department of Education, and Tax Foundation of Hawaii provided comments on this measure.

Your Committees find that the definition of school supplies in this measure could present legal concerns and should be amended to assuage these concerns and to ensure that there are no loopholes. Furthermore, your Committees find that although such tax holidays have often caused businesses to hold off on purchasing office supplies until the holiday because many school supplies are also useful for offices and businesses, the overall impact of shopping on the holiday in regards to revenue to the State, as well as economic activity, outweigh these concerns.

Your Committees have amended this measure by:

(1) Emphasizing that the definition of school supplies includes textbooks and is limited to the all-inclusive list contained in this measure; and

(2) Changing its effective date to July 1, 2112.

As affirmed by the records of votes of the members of your Committees on Economic Development & Business and Lower & Higher Education that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 1158, S.D. 2, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 1158, S.D. 2, H.D. 1, and be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committees on Economic Development & Business and Lower & Higher Education,

____________________________ JUSTIN H. WOODSON, Chair

____________________________ ANGUS L.K. McKELVEY, Chair