STAND. COM. REP. NO. 1632

Honolulu, Hawaii

RE: H.B. No. 1043

H.D. 3

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred H.B. No. 1043, H.D. 3, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TRANSIENT ACCOMMODATIONS TAX,"

begs leave to report as follows:

The purpose and intent of this measure is to facilitate the administration of the transient accommodations tax.

More specifically, the measure:

(1) Provides that any taxpayer who receives gross rental proceeds shall pay the tax;

(2) Replaces certain references to "operator and plan manager" with "taxpayer" or "person";

(3) Clarifies that a certificate of registration is required for persons advertising transient accommodations;

(4) Eliminates the misdemeanor criminal penalty for failing to register and replaces it with a monetary fine structure;

(5) Applies the personal liability provision under the general excise tax law to the transient accommodations tax; and

(6) Repeals provisions establishing the office of the taxation district in which the taxes arose or the office of the first taxation district in Honolulu as the recipients of periodic returns.

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

Your Committee received written comments on this measure from the Tax Foundation of Hawaii and one individual.

Your Committee finds that the transient accommodations tax provides the State with necessary revenues. Your Committee further finds that statutory language requires clarification to ensure effective enforcement and administration of the tax.

Your Committee has amended this measure by:

(1) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; 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 H.B. No. 1043, H.D. 3, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as H.B. No. 1043, H.D. 3, S.D. 2.

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

________________________________

DONOVAN M. DELA CRUZ, Chair