STAND. COM. REP. NO.1282

Honolulu, Hawaii

, 2001

RE: H.B. No. 1684

H.D. 1

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-First State Legislature

Regular Session of 2001

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred H.B. No. 1684, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO STATE AND LOCAL TAXATION OF MOBILE TELECOMMUNICATIONS SERVICES,"

begs leave to report as follows:

The purpose of this measure is to provide for regulation and taxation of state and local wireless telecommunications services consistent with the federal Mobile Telecommunications Sourcing Act.

Your Committee received testimony in favor of this measure from the Department of Taxation, VoiceStream Wireless, AT&T Wireless, Verizon Wireless, and Sprint. Your Committee received comments on this measure from Tax Foundation of Hawaii.

Your Committee finds that the Mobile Telecommunications Sourcing Act (MTSA) simplifies the method of sourcing the income from wireless services. The MTSA has developed a uniform method of sourcing wireless services for all states. The wireless industry and its customers can now determine where all calls will be taxed by simply determining the customer's place of primary use. This new method avoids multiple taxation, addresses administrative concerns for both the telecommunications industry and taxing authorities, and is intended to be revenue neutral.

Your Committee has amended this measure by:

(1) Establishing a new Part of Chapter 239 for the definitions and generally applicable provisions that are being incorporated from the MTSA.

(2) Deleting several proposed new sections of Chapter 239 to avoid unnecessary duplication.

(3) Adding a section relating to customers' procedures and remedies for correcting tax charges.

(4) Eliminating unnecessary provisions such as the provision establishing how the MTSA standards would apply to county general excise and use tax surcharge, which is already provided by Hawaii's single-rate tax structure.

(5) Adding language clarifying that the apportionment procedures that apply to interstate telecommunication services will apply to interstate mobile telecommunications services to be taxed as well.

(6) Amending the definition of "gross income" by adopting the standards of the MTSA.

(7) Defecting the effective date as a means of channeling this measure to conference.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1684, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1684, H.D. 1, S.D. 1, and be referred to the Committee on Ways and Means.

 

Respectfully submitted on behalf of the members of the Committee on Commerce, Consumer Protection and Housing,

____________________________

RON MENOR, Chair