STAND. COM. REP. NO. 2751

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 Ways and Means, to which was referred S.B. No. 2376, S.D. 1, 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 amend the cigarette tax and tobacco tax law.

Specifically, this measure:

(1) Repeals and eliminates the deferred payment purchase option for cigarette tax stamps; and

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

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.

Your Committee finds that this measure amends Chapter 245, Hawaii Revised Statutes, by repealing all provisions related to the "deferred payment purchase" of required cigarette tax stamps. Your Committee also finds that, according to the Department of Taxation, the deferred payment purchase of cigarette tax stamps is no longer necessary, and requiring that taxpayers pay for cigarette tax stamps upon purchase is the most efficient way to administer this program.

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. 2376, S.D. 1, and recommends that it pass 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