HOUSE OF REPRESENTATIVES

H.B. NO.

109

TWENTY-EIGHTH LEGISLATURE, 2015

 

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 all taxpayers are required to pay taxes on the income that they earn from business conducted under a professional or vocational license. However, some taxpayers file general excise tax returns, but not income tax returns, and some taxpayers fail to file any tax returns at all. This may result in a shift of tax obligations to other taxpayers since tax rates may have to be increased to ensure adequate funding for state programs.

Currently, a tax clearance is required for certain state contracts, including those over $25,000, for procuring a liquor license, and in certain other instances. Requiring a tax clearance to be submitted with the application for or renewal of a license ensures that the holder of a license granted by the State is in compliance with state tax laws. Professional or vocational license holders who reside in another state and do not have any Hawaii income can certify that the license holder is exempt from the tax clearance requirement.

The purpose of this Act is to require a tax clearance before a professional or vocational license may be issued or renewed.

SECTION 2. Chapter 231, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"231- Tax clearance before issuance and renewal of professional and vocational licenses. Upon request of a person seeking to obtain or renew a professional or vocational license subject to the jurisdiction of the department of commerce and consumer affairs, the director of taxation shall review the person's tax records, and if the director finds that the person:

(1) Does not owe the State any delinquent taxes, penalties, or interest;

(2) Has entered into and is complying with an installment plan agreement with the department of taxation for the payment of delinquent taxes in installments; or

(3) Is not subject to income taxation in Hawaii;

then the director shall issue a certificate stating that the person is in compliance with the tax laws of the State."

SECTION 3. Chapter 436B, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"436B- Tax clearance before issuance and renewal of professional and vocational licenses. No professional or vocational license shall be issued or renewed by the department unless the applicant presents to the issuing agency a certificate signed by the director of taxation, showing that the applicant:

(1) Does not owe the State any delinquent taxes, penalties, or interest;

(2) Has entered into and is complying with an installment plan agreement with the department of taxation for the payment of delinquent taxes in installments; or

(3) Is not subject to income taxation in Hawaii."

SECTION 4. The department of taxation shall prepare any forms that may be necessary for the tax clearance for the renewal of professional or vocational licenses.

SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date.

SECTION 6. New statutory material is underscored.

SECTION 7. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2016.

 

INTRODUCED BY:

_____________________________

 

 


 


 

Report Title:

Tax Clearance; Professional or Vocational License

 

Description:

Requires a tax clearance before a professional or vocational license may be issued or renewed. Applies to taxable years beginning after 12/31/2016.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.