STAND. COM. REP. NO. 2661

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 2135

 

 

 

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

 

Sir:

 

     Your Committee on Ways and Means, to which was referred S.B. No. 2135 entitled:

 

"A BILL FOR AN ACT RELATING TO TAXATION,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to amend the excise tax rate on the sale of large cigars.

 

     Specifically, this measure amends the tax rate on sales of large cigars that occur on or after July 1, 2016, to the lesser of 50 cents for each large cigar or fifty percent of the wholesale price of each large cigar.

 

     Your Committee received testimony in support of this measure from the Cigar Association of America, Inc.; Hawaii Cigar Association; Hawaii Food Industry Association; Hawaii Smokers Alliance; Mokuleia Cigar Company; Kauai Cigar Company; and sixteen individuals.

 

     Your Committee received testimony in opposition to this measure from the Department of Health; American Cancer Society Cancer Action Network; American Heart Association; American Lung Association of the Mountain Pacific; Coalition for a Tobacco-Free Hawaii; and fifty-six individuals.

 

     Your Committee received comments on this measure from the Department of Taxation; Tax Foundation of Hawaii; and one individual.

 

     Your Committee finds that the excise tax rate imposed on the sale of large cigars makes it difficult for local producers of cigars to compete with mail-order suppliers that sell cigars in Hawaii without paying state taxes and whose customers do not file their tax liability under the State's use tax law.  Your Committee further finds that this measure addresses this issue by setting a cap on the excise tax imposed on the sale of large cigars, thereby limiting the burden caused by the tax.

 

     As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 2135 and recommends that it pass Second Reading and be placed on the calendar for Third Reading.

 

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

 

 

 

________________________________

JILL N. TOKUDA, Chair