STAND. COM. REP. NO. 3010

Honolulu, Hawaii

RE: S.B. No. 2921

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 2921 entitled:

"A BILL FOR AN ACT RELATING TO WITHHOLDING TAX,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Amend the due date for employers to file the wage and tax statement, from the last day of February to January 31 following the close of the calendar year; and

(2) Establish a $25 penalty that may be imposed on employers that fail to timely furnish and file, or file electronically if required, the wage and tax statement.

Your Committee received testimony in support of this measure from the Department of Taxation.

Your Committee received comments on this measure from the Tax Foundation of Hawaii.

Your Committee finds that this measure will assist employers by aligning the State's filing deadlines with those of the Internal Revenue Service. Your Committee also finds that the creation of a penalty will hold employers accountable for failing to meet their tax withholding responsibilities.

Your Committee has amended this measure by:

(1) Specifying that an employer's failure to furnish the wage and tax statement to an employee by the prescribed due date must be wilful for a penalty to be imposed; and

(2) Making technical nonsubstantive changes for purposes of clarity, consistency, and style.

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 is in accord with the intent and purpose of S.B. No. 2921, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2921, S.D. 1, and be placed on the calendar for Third Reading.

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

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DONOVAN M. DELA CRUZ, Chair