STAND. COM. REP. NO.  332-08

 

Honolulu, Hawaii

                , 2008

 

RE:   H.B. No. 2379

 

 

 

 

Honorable Calvin K.Y. Say

Speaker, House of Representatives

Twenty-Fourth State Legislature

Regular Session of 2008

State of Hawaii

 

Sir:

 

     Your Committee on Human Services & Housing, to which was referred H.B. No. 2379 entitled:

 

"A BILL FOR AN ACT RELATING TO TAXATION,"

 

begs leave to report as follows:

 

     The purpose of this bill is to assist the working poor by establishing a refundable state earned income tax credit (EITC) equal to 20 percent of the federal EITC.

 

     The Legal Aid Society of Hawaii, Aloha United Way, and Hawai'i Alliance for Community-Based Economic Development testified in support of this bill.  The Department of Taxation (DOTAX), Department of Human Services, and Tax Foundation of Hawaii provided comments.

 

     Your Committee notes that DOTAX's testimony states that this measure will provide approximately $23,800,000 in tax relief to about 68,560 taxpayers.  While DOTAX's testimony also cited that the Internal Revenue Service has experienced compliance problems with the EITC, a March 2007 letter from DOTAX states that the highest percentage of under-reporters are taxpayers earning less than $10,000 or more than $100,000 annually.  Thus, your Committee believes that there is no higher risk of fraud in Hawaii for an EITC than for taxpayers in a high-income tax bracket.

 


     As affirmed by the record of votes of the members of your Committee on Human Services & Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2379 and recommends that it pass Second Reading and be referred to the Committee on Finance.

 

 

Respectfully submitted on behalf of the members of the Committee on Human Services & Housing,

 

 

 

 

____________________________

MAILE SHIMABUKURO, Chair