STAND. COM. REP. 999

Honolulu, Hawaii

, 2003

RE: S.B. No. 1629

S.D. 1

H.D. 1

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Consumer Protection and Commerce, to which was referred S.B. No. 1629, S.D. 1, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO THE GENERAL EXCISE TAX,"

begs leave to report as follows:

The purpose of this bill is to extend the existing general excise tax (GET) exemptions for amounts received and expended by managers for condominium common expenses, and by hotel operators for hotel employee expenses, to include amounts received after December 31, 2002, by:

(1) A submanager of an association of apartment owners or a nonprofit homeowners or community association in reimbursement for sums paid for common expenses;

(2) An operator of a hotel from a timeshare association equal to and which are disbursed by the operator for employee wages, salaries, payroll taxes, and insurance premiums and benefits; and

(3) A suboperator of a hotel from the hotel owner, the hotel operator, or a timeshare association, equal to and which are disbursed by the suboperator for employee wages, salaries, payroll taxes, and insurance premiums and benefits.

Testimony in support of this bill was submitted by Outrigger Hotels, Community Associations Institute, and a concerned individual. The Tax Foundation of Hawaii offered comments on this measure.

Your Committee believes that this bill would extend equitable treatment to taxpayers in similar situations. Your Committee also understands that by extending the GET exemption to include sums received and expended by submanagers of an association, hotel operators, and hotel suboperators in the course of managing a hotel, condominium, or timeshare property, this bill would remove financial barriers to alternative management arrangements and allow local companies to operate in the same way as companies on the mainland do without any significant loss of tax revenue.

As affirmed by the record of votes of the members of your Committee on Consumer Protection and Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1629, S.D. 1, H.D. 1, and recommends that it be referred to the Committee on Finance.

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

 

____________________________

KENNETH T. HIRAKI, Chair