STAND. COM. REP. NO. 465

Honolulu, Hawaii

RE: S.B. No. 1468

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2025

State of Hawaii

Sir:

Your Committee on Agriculture and Environment, to which was referred S.B. No. 1468 entitled:

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

begs leave to report as follows:

The purpose and intent of this measure is to repeal, on January 1, 2026, the general excise tax exemptions for amounts received by:

(1) Independent sugar cane farmers; and

(2) Contractors of the federal Patient-Centered Community Care Program established by the United States Department of Veterans Affairs pursuant to title 38 United States Code section 8153.

Your Committee received testimony in support of this measure from the Department of Taxation.

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

Your Committee finds that good tax policy dictates that taxes should be simple, equitable, and transparent. Your Committee notes that because so few taxpayers utilize the general excise tax exemption for independent sugar cane farmers, aggregated data cannot be released for risk of identifying the claimants. Likewise, no contractors of the federal Patient-Centered Community Care Program have claimed the exemption in the past two years, indicating that it has no benefit to the public. This administration measure supports tax equity and government efficiency by repealing unused or under-utilized exemptions.

Your Committee has amended this measure by 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 Agriculture and Environment that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1468, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1468, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Agriculture and Environment,

________________________________

MIKE GABBARD, Chair