Report Title:

Counties; Vehicle Ad Valorem Tax

Description:

Authorizes the counties to impose a county vehicle ad valorem tax. Provides for one-third of the revenues to be distributed to the county that collected the tax, one-third to the state highway fund, and the remainder to the state general fund.

HOUSE OF REPRESENTATIVES

H.B. NO.

1726

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO VEHICLE TAXES.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that the county vehicle weight tax establishes a flat rate system that imposes the same tax on vehicles based on their weight, regardless of whether the vehicle is a new luxury car or an older model car. The legislature finds that this system is regressive, in that it allows luxury car owners to pay the same amount of tax as that imposed on older vehicles of the same weight, despite the fact that the owner of the luxury car paid significantly more for that vehicle. The legislature finds that there is a need to establish a more equitable tax to increase revenues to the State and counties.

The purpose of this Act is therefore to authorize each county to impose, levy, assess, collect, and otherwise administer a tax based on the market value of all vehicles located in the county, also known as an "ad valorem" tax. Under this new system, revenues will be divided equally among the counties, the state highway fund, and the state general fund. The legislature finds that this tax, which is imposed in conjunction with the county vehicle weight tax, provides for a more progressive and equitable system to generate revenues.

SECTION 2. Chapter 249, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"249-   County vehicle ad valorem tax. (a) Notwithstanding any law to the contrary, each county shall impose, levy, assess, collect, and otherwise administer a tax to be known as the county vehicle ad valorem tax on all vehicles located in the county. The tax shall be assessed at the rate of one per cent of the value of the vehicle as established in the Kelly Blue Book or other nationally accepted vehicle price guides.

(b) The county vehicle weight tax and the state vehicle registration fee and state vehicle weight tax imposed by this chapter shall continue to be imposed, levied, assessed, collected, and otherwise administered as provided in this chapter.

(c) The provisions of this chapter relating to the exemptions from the county vehicle weight tax currently specified in this chapter shall be applied only to vehicles exempt from the county vehicle ad valorem tax under subsection (d).

(d) The following vehicles shall be exempt from the county vehicle ad valorem tax:

(1) Ambulances, limousines, rental or U-drive motor vehicles, buses, taxi cabs, and vehicles having a gross vehicle weight rating of more than twenty six thousand and one pounds; and

(2) Any vehicle that is more than ten years old.

(e) The tax shall become due and payable on January 1 and shall be paid before April 1 in each year together with all other taxes and fees levied by this chapter; provided that should any county elect to renew motor vehicle registrations on a staggered basis as authorized by section 286-51, the county vehicle ad valorem tax shall likewise be staggered so that this tax is collected with the county vehicle weight tax. The county director of finance shall not register a vehicle without payment of the tax imposed under this section.

(f) The director or finance of each county shall retain 33.3 per cent of the revenues collected in that county pursuant to this section. The balance of the revenues collected shall be transmitted to the state director of finance, of which equal amounts shall be deposited into the state highway fund and the state general fund.

(g) Each county may adopt administrative rules pursuant to chapter 91 as may be necessary to implement this section."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on January 1, 2005; except that section 249-   (g) in section 2 of this Act shall take effect upon approval.

INTRODUCED BY:

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