STAND. COM. REP. NO. 550

Honolulu, Hawaii

, 2005

RE: S.B. No. 1133

S.D. 1

 

 

Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.B. No. 1133 entitled:

"A BILL FOR AN ACT RELATING TO RENTAL MOTOR VEHICLE SURCHARGE TAX,"

begs leave to report as follows:

The purpose of this measure is to amend the rental motor vehicle surcharge tax.

Testimony in support of this measure was submitted by Avis Rent A Car, Budget Rent A Car, Catrala-Hawaii, and Dollar Thrifty Automotive Group, Inc. The Department of Taxation and the Department of Transportation submitted testimony in opposition to this measure. Comments were also submitted by the Tax Foundation of Hawaii.

In 1999, the Legislature temporarily raised the rental motor vehicle tax from $2 to $3 per day, starting on September 1, 1999 and ending on August 31, 2007. The purpose of the increase was to temporarily produce added revenues for the general fund. However, your Committee finds that no other industry has been assessed and endured a similar tax increase to assist the State's general fund. This measure repeals the increased rental motor vehicle surcharge tax of $3 per day and restores the $2 per day tax.

Your Committee further finds that since the inception of the tax increase, the general fund has realized better than anticipated revenues. However, your Committee also notes that the increase does not help Hawaii's competitive image as a tourist destination. Thus, your Committee finds that these competing interests merit further consideration and has amended this measure by inserting an effective date of July 1, 2050 to ensure more discussion on this issue.

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 S.B. No. 1133, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1133, 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