STAND. COM. REP. NO. 510

Honolulu, Hawaii

RE: S.B. No. 454

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committees on Commerce and Consumer Protection and Transportation and Culture and the Arts, to which was referred S.B. No. 454 entitled:

"A BILL FOR AN ACT RELATING TO THE RENTAL MOTOR VEHICLE SURCHARGE TAX,"

beg leave to report as follows:

The purpose and intent of this measure is to require the rental motor vehicle surcharge tax to be pro-rated if the vehicle is rented or leased for a portion of the day.

Your Committees received comments on this measure from the Department of Taxation, Enterprise Mobility, and Tax Foundation of Hawaii.

Your Committees find that this measure ensures the tax assessed on a rental motor vehicle that is rented or leased for a portion of a day is assessed fairly.

Your Committees acknowledge the testimony of the Department of Taxation that modeling language in this measure on existing law would allow the Department to implement this measure more effectively.

Accordingly, your Committees have amended this measure by:

(1) Clarifying that the pro-rated tax shall be assessed at a rate of $0.25 per half hour, or any portion of a half hour that the vehicle is rented; provided that a vehicle that is rented for six hours or more shall be assessed the full rate;

(2) Inserting an effective date of July 1, 2050, to encourage further discussion; and

(3) Making a technical, nonsubstantive amendment for the purposes of clarity and consistency.

As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Transportation and Culture and the Arts that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 454, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 454, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Transportation and Culture and the Arts,

________________________________ CHRIS LEE, Chair

________________________________ JARRETT KEOHOKALOLE, Chair