STAND. COM. REP. NO. 2533

                                   Honolulu, Hawaii
                                                     , 2000

                                   RE:  S.B. No. 2289
                                        S.D. 2




Honorable Norman Mizuguchi
President of the Senate
Twentieth State Legislature
Regular Session of 2000
State of Hawaii

Sir:

     Your Committee on Ways and Means, to which was referred S.B.
No. 2289, S.D. 1, entitled: 

     "A BILL FOR AN ACT RELATING TO PREPAID TELEPHONE CALLING
     SERVICE,"

begs leave to report as follows:

     The purpose of this measure is to impose only the general
excise tax on the sale of prepaid telephone calling services.

     Currently, telephone carriers charge consumers the public
service company tax and the general excise tax when a prepaid
calling card is used while some retailers charge consumers the
general excise tax on the sale of the cards.  Therefore, some
consumers are taxed twice; when the card is purchased and when
used.  This measure imposes the general excise tax on prepaid
telephone calling services at the point of sale.  Your Committee
is in agreement that simplifying the tax results in precise tax
calculations and eliminates multiple taxation on consumers.

     Your Committee amended the measure by including prepaid
telephone calling services under the definition of property in
the use tax law.  Your Committee also made technical,
nonsubstantive changes for purposes of clarity.

     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. 2289, S.D. 1, as amended herein, and recommends that it pass

 
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                                   STAND. COM. REP. NO. 2533
                                   Page 2


Third Reading in the form attached hereto as S.B. No. 2289,
S.D. 2.

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



                                 ________________________________
                                 CAROL FUKUNAGA, Co-Chair



                                 ________________________________
                                 ANDREW LEVIN, Co-Chair

 
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