STAND. COM. REP. NO. 2539

Honolulu, Hawaii

RE:    S.B. No. 2896

       S.D. 1

Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2014

State of Hawaii

Madam:

     Your Committee on Ways and Means, to which was referred S.B. No. 2896 entitled:

"A BILL FOR AN ACT RELATING TO GENERAL EXCISE TAX WHOLESALE RATE IMPOSED UPON SALE OF TANGIBLE PERSONAL PROPERTY,"

begs leave to report as follows:

     The purpose and intent of this measure is to clarify that wholesale sales of tangible personal property are subject to the one-half of one per cent general excise tax rate.

     The Department of Taxation submitted testimony in support of this measure.  The Tax Foundation of Hawaii submitted comments on this measure.

     Your Committee finds that section 3 of Act 135, Session Laws of Hawaii 2003, inadvertently repealed the one-half of one per cent general excise tax rate imposed upon the wholesale sale of tangible personal property.  This measure addresses the inadvertent repeal and clarifies that the proper general excise tax rate imposed upon the wholesale sale of tangible personal property is one-half of one per cent.

     Your Committee has amended this measure by:

     (1)  Removing reference to the general excise tax exemption provided under section 237-29.55, Hawaii Revised Statutes; and

     (2)  Making technical nonsubstantive amendments for the purposes of consistency, clarity, 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. 2896, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 2896, S.D. 1, and be placed on the calendar for Third Reading.

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

____________________________

DAVID Y. IGE, Chair