STAND. COM. REP. NO.3294
RE: H.B. No. 2569
Honorable Robert Bunda
President of the Senate
Twenty-First State Legislature
Regular Session of 2002
State of Hawaii
Your Committee on Ways and Means, to which was referred H.B. No. 2569, H.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO THE CONFORMITY OF THE STATE TAX LAWS TO THE UNITED STATES CONSTITUTION,"
begs leave to report as follows:
The purpose of this measure is to provide a General Excise Tax (GET) offset for taxes paid in another state to avoid constitutionally prohibited multiple taxation.
Testimony supporting this measure was received from the Department of Taxation. Comments on this measure were received from the Tax Foundation of Hawaii.
Your Committee notes that this measure is necessary to avoid possible constitutional problems resulting from the taxation of the same goods or services by Hawaii and another jurisdiction. While this does not occur with great frequency, the Department of Taxation presently has no tools to avoid a possible court case in this area. The provisions of this measure will give the Department of Taxation the appropriate language to address the possibility of double taxation in a manner similar to that provided the Department under section 238-3(a), Hawaii Revised Statutes.
Your Committee has amended this measure by replacing its contents with the Senate version, S.B. No. 2827, S.D. 1, which further clarifies that this measure provides a GET offset for taxes paid to another state that may be calculated by deduction, allocation, or any other method necessary to comply with the U.S. Constitution.
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 H.B. No. 2569, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2569, H.D. 1, 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,
BRIAN T. TANIGUCHI, Chair