STAND. COM. REP. NO. 2132

Honolulu, Hawaii

RE: S.B. No. 2376

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2022

State of Hawaii

Sir:

Your Committee on Commerce and Consumer Protection, to which was referred S.B. No. 2376 entitled:

"A BILL FOR AN ACT RELATING TO TOBACCO TAXES,"

begs leave to report as follows:

The purpose and intent of this measure is to:

(1) Repeal and eliminate the deferred payment purchase option for cigarette tax stamps; and

(2) Require licensees to pay for stamps at the time of purchase using cash, certified check, or bank transfer.

Your Committee received testimony in support of this measure from the Department of Taxation. Your Committee received testimony in opposition to this measure from one individual. Your Committee received comments on this measure from the Tax Foundation of Hawaii.

Your Committee finds that, according to testimony from the Department of Taxation, the deferred payment purchase of cigarette stamps is no longer necessary. Having the taxpayer pay upon purchase is more efficient and this measure will eliminate unnecessary burdens to better streamline the administration of this program.

Your Committee has amended this measure by:

(1) Deleting amendments to subsection (a) of section 245-26, Hawaii Revised Statutes, to reinstate existing statutory language that allows the Department of Taxation to modify by rule the stamp fee to reflect actual costs incurred by the State in providing the stamps; and

(2) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Commerce and Consumer Protection that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2376, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2376, S.D. 1, and be referred to your Committee on Ways and Means.

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

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ROSALYN H. BAKER, Chair