REPORT TITLE:
Value Added Tax; Study


DESCRIPTION:
Requires the department of taxation to conduct a study to
determine the economic effects of a value added tax.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           730
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO VALUE ADDED TAX.



BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  The legislature finds that more than fifty
 
 2 countries currently have value-added taxes, including twenty to
 
 3 twenty-five industrialized countries in the Organization for
 
 4 Economic Cooperation and Development.  A value-added tax assesses
 
 5 consumption.  This results in more income savings and more
 
 6 capital available for investments.  A value-added tax is also
 
 7 non-pyramiding and not considered regressive.  The State needs to
 
 8 determine the effects of a value-added tax as an alternative
 
 9 source of generating revenue and its impact on business,
 
10 consumers, and Hawaii's economy.  The purpose of this Act is to
 
11 require the department of taxation to conduct a study to
 
12 determine the economic effects of a value-added tax in Hawaii.
 
13      SECTION 2.  (a)  The department of taxation with the
 
14 assistance of the department of business, economic development,
 
15 and tourism shall conduct a study on the economic benefits and
 
16 disadvantages of a value-added tax including:
 
17      (1)  The effects of a value-added tax on business, consumers
 
18           (costs of goods and services), government, and the
 
19           overall economy;
 

 
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 1      (2)  Whether a value-added tax can replace the general
 
 2           excise tax and the benefits and consequences of such a
 
 3           change including any tax revenue gain or loss,
 
 4           projected economic growth or loss, and any effects on
 
 5           consumer/business spending;
 
 6      (3)  The experience of other states and countries with value
 
 7           added taxes;
 
 8      (4)  Alternatives to the general excise tax (besides a
 
 9           value-added tax) and their effects on the State's
 
10           economy; and
 
11      (5)  Any other issue or subject the department finds worthy
 
12           of further study.
 
13      (b)  The department of taxation and the department of
 
14 business, economic development, and tourism shall consult with
 
15 the Tax Foundation of Hawaii, other government and private sector
 
16 agencies, and any other interested and relevant parties in
 
17 conducting the study.
 
18      (c)  The department of taxation shall report its findings,
 
19 recommendations, and proposed legislation, if any, no later than
 
20 twenty days prior to the convening of the regular session of
 
21 2000.
 
22      SECTION 3.  This Act shall take effect upon its approval.
 
23 
 
24                           INTRODUCED BY:  _______________________
 

 
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