HOUSE OF REPRESENTATIVES
TWENTY-SIXTH LEGISLATURE, 2011
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO TAXATION.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that allowing all tax documents to be filed electronically will provide benefits to both the taxpayer and the State. Electronic filing of all documents will allow taxpayers, particularly businesses, to accomplish the filing in a timely and cost-efficient manner. For the State, electronic filing will decrease administrative costs and make more efficient use of human and fiscal department resources for more important issues, such as delinquent tax collections and enforcement.
The legislature further finds that amendments made by Act 196, Session Laws of Hawaii 2009, to advance payment of the general excise tax from the last day of the month to the twentieth day of the month have had a devastating impact on Hawaii businesses, particularly small businesses. While Act 196 achieved one of its purposes – to generate a one-time windfall of revenue to the State – the long-term effect has been to hinder Hawaii's economic recovery by placing an undue burden on the business sector.
In addition, in 2010, the senate committee on economic development and technology and the house committee on economic revitalization, business, and military affairs convened an informal small business discussion group to address the most critical issues facing the small business sectors within Hawaii's economy. Representatives from The Chamber of Commerce of Hawaii, construction and trades industries, community nonprofits, the agricultural sector, food and restaurant industries, retailing, the science and technology sector, the commercial transportation industry, and interested stakeholders developed a package of bills that addresses the most pressing problems facing Hawaii's small business community.
The purpose of this Act is to support the findings of the small business discussion group and its recommendations to:
(1) Require the department of taxation to establish a system to allow taxpayers to file all tax returns, applications, reports, and other documents electronically, telephonically, or by optical means;
(2) Provide for electronic payment of general excise taxes for businesses; and
(3) Reestablish the filing and payment deadline of general excise taxes, including but not limited to quarterly filing requirements and the payment of periodic insurance premium taxes, to the last day of the month.
SECTION 2. Section 231-8.5, Hawaii Revised Statutes, is amended to read as follows:
§231-8.5[ ]] Electronic
filing of tax returns. (a) The department [ may allow filing by
electronic, telephonic, or optical means of any tax return, application,
report, or other document] shall establish a system to allow taxpayers
to file all tax returns, applications, reports, and other documents
required under [ the provisions of] title 14 [ administered by the
department.] electronically, telephonically, or by optical means;
provided that no cost shall be incurred by the taxpayer for the electronic
filing of tax returns. The date of filing shall be the date the tax
return, application, report, or other document is transmitted to the department
in a form and manner prescribed by departmental rules adopted pursuant to
chapter 91. The department may determine alternative methods for the signing,
subscribing, or verifying of a tax return, application, report, or other
document that shall have the same validity and consequences as the actual
signing by the taxpayer.
(b) A filing under this section shall be treated in the same manner as a filing subject to the penalties under section 231-39."
SECTION 3. Section 231-9.9, Hawaii Revised Statutes, is amended to read as follows:
"§231-9.9 Filing and payment of taxes
by electronic funds transfer. (a) The director of taxation is authorized
to require every person whose tax liability for any one taxable year exceeds [
$ and who
files a tax return for any tax, including consolidated filers, to remit taxes
by one of the means of electronic funds transfer approved by the department[ ;]
or through the State's internet portal; provided that for withholding
taxes under section 235-62, electronic funds transfers shall apply to annual
tax liabilities that exceed $40,000. Notwithstanding the tax liability
thresholds in this subsection, the director of taxation is authorized to
require any person who is required to electronically file a federal return or
electronically remit any federal taxes to the federal government, to
electronically file a state return and electronically remit any state taxes
under title 14 to the department. The director is authorized to grant an
exemption to the electronic filing and payment requirements for good cause.
(b) Any person who files a tax return for any tax and is not required by subsection (a) to remit taxes by means of electronic funds transfer or through the State's internet portal may elect to remit taxes by one of the means of electronic funds transfer approved by the department with the approval of the director of taxation.
(c) If a person who is required under subsection (a) to file a return electronically or remit taxes by one of the means of electronic funds transfer approved by the department or through the State's internet portal fails to file electronically or to remit the taxes using an approved method on or before the date prescribed therefor, unless it is shown that the failure is due to reasonable cause and not to neglect, there shall be added to the tax required to be so remitted a penalty of two per cent of the amount of the tax. The penalty under this subsection is in addition to any penalty set forth in section 231-39.
(d) No later than twenty days prior to the convening of each regular session, the department shall submit a report to the legislature containing:
(1) The number of taxpayers who were assessed the two per cent penalty pursuant to subsection (c);
(2) The amounts of each assessment; and
(3) The total amount of assessments collected for the previous year.
(e) No costs shall be incurred by the taxpayer for the electronic filing of tax returns or remittance of taxes under this section or any other section."
SECTION 4. The purpose of this part is to reestablish the filing and payment deadline of various taxes, including but not limited to quarterly filing requirements and the payment of periodic insurance premium taxes, to the last day of the month.
SECTION 5. Act 22, Session Laws of Hawaii 2010, is amended by amending section 14 to read as follows:
"SECTION 14. This Act
shall take effect on July 1, 2010[
.], and shall be repealed on June
30, 2011; provided that on July 1, 2011, sections 237D-6, 238-5, 243-10, 244D-6,
245-5, 245-28, 245-31, 251-4, 431:7-201, and 431:7-202, Hawaii Revised
Statutes, as amended by sections 2 through 11 of this Act, shall be reenacted in
the form in which they read on June 30, 2010."
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 2050.
Taxation; Electronic Filing; Filing Deadlines
Requires the department of taxation to establish a system to allow taxpayers to file all tax returns, applications, reports, and other documents electronically, telephonically, or by optical means, with no additional cost to the taxpayer; lowers the threshold for any taxpayer required to remit taxes by one of the means of electronic funds transfer from $100,000 to an unspecified amount in tax liability; reestablishes the filing and payment deadline of various taxes, including but not limited to quarterly filing requirements and the payment of periodic insurance premium taxes, to the last day of the month. Effective 7/1/2050. (SD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.