STAND. COM. REP. NO. 923

Honolulu, Hawaii

RE: S.B. No. 614

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 S.B. No. 614, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to exempt certain unemployment insurance benefits from the state income tax.

More specifically, this measure:

(1) Exempts from the state income tax any unemployment insurance compensation and pandemic unemployment assistance payments received between March 1, 2020, and December 31, 2020; and

(2) Requires the Department of Taxation to allow individuals to credit against the individual's overall state income tax liability the state income tax that was deducted and withheld from the individual's unemployment compensation or pandemic unemployment assistance between March 1, 2020, and December 31, 2020.

Your Committee received written comments in support of this measure from Hawaii Iron Workers Stabilization Fund; Hawaii Lodging and Tourism Association; Hawaii Workers Center; IATSE Local 665; ILWU Local 142; Pono Hawaii Initiative; UFCW 480; We Are One, Inc.; and numerous individuals.

Your Committee received written comments in opposition to this measure from four individuals.

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

Your Committee finds that exempting from state income tax certain unemployment compensation and pandemic unemployment assistance payments received by residents of the State as a result of the coronavirus disease 2019 pandemic will help to alleviate significant economic hardships experienced by numerous residents of the State.

Your Committee has amended this measure by 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. 614, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 614, S.D. 2.

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

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DONOVAN M. DELA CRUZ, Chair