Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-First State Legislature

Third Special Session of 2001

State of Hawaii

Sir:

Your Committee on Finance, to which was referred H.B. No. 5 entitled:

begs leave to report as follows:

The purpose of this bill is to reduce the filing burden for taxpayers by increasing the filing thresholds for taxpayers filing withholding, general excise, use, transient accommodations, and rental motor vehicle and tour vehicle surcharge tax returns.

The Chamber of Commerce of Hawaii, Department of Taxation, Visitor Industry Coalition, the Hawaii Chapter of the American Resort Development Association, Hawaii Transportation Association, Hawaii Tourism Authority, and the Hawaii Business Roundtable supported this bill. The State Department of Transportation supported the intent of this bill. The Tax Foundation of Hawaii commented on this bill.

The events of September 11, 2001, have had a tremendous influence on both the state and national economies, unexpectedly affecting the livelihood of millions of citizens. Tourism, Hawaii's principal industry, accounts for nearly $10.9 billion in general revenues each year and was severely impacted by these attacks. The number of travelers to the State has decreased by twenty to fifty percent, which has not only affected the tourism industry but the economy of the entire State.

Dealing with this economic crisis is one reason the Governor has convened a special session. Your Committee feels that in order to avoid an economic catastrophe, the State must institute measures that immediately nourish our ailing economy.

The higher filing thresholds established in this bill will allow taxpayers to file less frequently, thereby encouraging filing compliance and increasing the amount of cash that taxpayers have on hand. This bill will provide much-needed fiscal flexibility to many companies associated with the visitor industry as well as other employers statewide.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 5 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.