STAND. COM. REP. NO. 422-20

Honolulu, Hawaii

, 2020

RE: H.B. No. 2246

H.D. 1

Honorable Scott K. Saiki

Speaker, House of Representatives

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Consumer Protection & Commerce, to which was referred H.B. No. 2246, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAX RETURN PREPARERS,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Require each tax return preparer to have a valid preparer tax identification number issued by the Internal Revenue Service and disclose this number on any return or claim for refund if required to do so by the Department of Taxation;

(2) Beginning on January 1, 2021, establish penalties for violations; and

(3) Authorize the Department of Taxation to bring a civil action for equitable relief against a tax return preparer.

Your Committee received testimony in support of this measure from the Department of Taxation and H&R Block. Your Committee received comments on this measure from the Tax Foundation of Hawaii.

Your Committee finds that many tax return preparers operate with little State oversight or accountability. Requiring all tax return preparers to have a preparer tax identification number will help ensure tax return preparers are held accountable for the returns they prepare. This measure also enables the Department to track tax return preparers in the State by leveraging the Internal Revenue Service identification number that is already required for preparing federal tax returns.

As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2246, H.D. 1, and recommends that it be referred to your Committee on Finance.

Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,

____________________________

ROY M. TAKUMI, Chair