142
HOUSE OF REPRESENTATIVES                H.R. NO.           
TWENTIETH LEGISLATURE, 2000                                
STATE OF HAWAII                                            
                                                             
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                     HOUSE RESOLUTION

ASSESSING THE COSTS AND BENEFITS OF ESTABLISHING AN ANNUAL RETAIL
   TAX HOLIDAY IN HAWAII.



 1      WHEREAS, for years, consumers and business have suffered
 2 under the weight of Hawaii's regressive tax system; and
 3 
 4      WHEREAS, consumers and retailers deserve a break from the
 5 heavy burden of general excise taxes; and
 6 
 7      WHEREAS, consumers and retailers need a tax holiday where,
 8 for a period not to exceed several days each year, sales of
 9 clothing and footwear under $100 would be exempt from the general
10 excise tax of 4%;
11 
12      WHEREAS, because the tax is imposed on the seller rather
13 than the purchaser, the tax savings should be passed on to the
14 consumer; and
15 
16      WHEREAS, tax holidays have been used successfully across the
17 United States; and
18 
19      WHEREAS, for example, Texas has lifted its 6.25% state sales
20 tax--along with all local sales taxes--on clothing and footwear
21 under $100, while New York and Florida have similar programs; and
22 
23      WHEREAS, many Texas retailers have reported seeing large
24 crowds during tax holidays usually seen only during the Christmas
25 selling season; and
26 
27      WHEREAS, in order to accommodate all of the shoppers, stores
28 in Texas adopted extended hours, added staff, and offered special
29 promotions usually reserved for the Christmas season; and
30 
31      WHEREAS, retailers in Texas have reported no dip in sales
32 after a tax holiday; and
33 
34      WHEREAS, a similar program in Hawaii would help both
35 consumers and retailers alike; and
36 
37      WHEREAS, Hawaii's compounding excise tax has stifled
38 economic growth, retarded retail sales and profits, and dampened
39 job creation; however, a tax holiday would have the opposite
40 effect by stimulating sluggish retail sales and giving a boost to
41 our sagging economy; now, therefore,

 
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                                     H.R. NO.           
                                                        
                                                        

 
 1      BE IT RESOLVED by the House of Representatives of the
 2 Twentieth Legislature of the State of Hawaii, Regular Session of
 3 2000, that the Legislative Reference Bureau conduct a study to
 4 determine the costs and benefits of suspending the 4% excise tax
 5 for a period of several days each year on clothing and footwear,
 6 where the sales price of the article is less than $100, provided
 7 that this exemption should apply to each article of clothing
 8 selling for less than $100, regardless of how many items are sold
 9 and regardless of the total amount of the bill; and
10 
11      BE IT FURTHER RESOLVED that the study include but not
12 limited to data and information on:
13 
14      (1) the impact on revenues experienced by other states that
15          have implemented a tax holiday;
16 
17      (2) changes in retail activity during and after a tax
18          holiday in other states;
19 
20      (3) the estimated economic impact of a tax holiday on Hawaii
21          retailers, consumers, and tax revenues;
22 
23      BE IT FURTHER RESOLVED that the Legislative Reference Bureau
24 submit its findings and recommendations based on data and
25 information discovered in the study to the Legislature no later
26 than twenty days before the convening of the Regular Session of
27 2001; and
28 
29      BE IT FURTHER RESOLVED that certified copies of this
30 Resolution be transmitted to the director of the department of
31 taxation, the director of the department of budget and finance,
32 the department of business, economic development & tourism, the
33 Hawaii Chamber of Commerce and the Retail Merchants Association
34 of Hawaii.
35 
36 
37 
38 
39                         OFFERED BY:______________________________