STAND. COM. REP. NO. 263

Honolulu, Hawaii

RE: S.B. No. 594

S.D. 1

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 S.B. No. 594 entitled:

"A BILL FOR AN ACT RELATING TO GENERAL EXCISE TAX,"

begs leave to report as follows:

The purpose and intent of this measure is to amend the state general excise tax law.

More specifically, this measure authorizes the Director of Taxation to exempt from monthly, quarterly, or semiannual general excise tax filing requirements a taxpayer whose annual general excise tax liability does not exceed $100; provided that the taxpayer files an annual return.

Your Committee received testimony in support of this measure from an individual.

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

Your Committee finds that, under current state law, periodic returns are required semiannually for taxpayers reporting less than $2,000 in annual general excise tax liability; quarterly for taxpayers reporting more than $2,000 and less than $4,000; and monthly for taxpayers reporting more than $4,000. Your Committee believes that this measure may ease the burden both for taxpayers who must file periodic returns, as well as the Department of Taxation, which must process the returns.

Your Committee has amended this measure by:

(1) Changing the effective date to apply to taxable years beginning after December 31, 2021; and

(2) Making technical nonsubstantive amendments 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. 594, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 594, 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