STAND. COM. REP. NO. 888
RE: S.B. No. 1196
Honorable Ronald D. Kouchi
President of the Senate
Thirty-First State Legislature
Regular Session of 2021
State of Hawaii
Your Committee on Ways and Means, to which was referred S.B. No. 1196, S.D. 1, entitled:
"A BILL FOR AN ACT RELATING TO WITHHOLDING TAX,"
begs leave to report as follows:
The purpose and intent of this measure is to facilitate employer compliance with income tax withholding requirements.
Specifically, the measure:
(1) Changes from the last day of February to January 31 following the close of a calendar year the deadline for an employer to file a duplicate of an employee's wage and tax statement with the Department of Taxation; and
(2) Subjects an employer to monetary penalties if the employer fails to timely furnish the wage and tax statement to an employee; fails to timely file the statement; or fails to file the statement electronically, if so required by law.
Your Committee received written comments in support of this measure from the Department of Taxation.
Your Committee received written comments on this measure from the Tax Foundation of Hawaii.
Your Committee finds that existing state tax law imposes no penalty upon an employer for failing to furnish an employee with the employee's wage and tax statement or failing to file a duplicate of that statement with the Department of Taxation. Your Committee believes that appropriate penalties would encourage compliance with applicable income tax law. Your Committee additionally finds that aligning the state filing deadline with the deadline established by the Internal Revenue Service will facilitate filing of duplicate statements by employers.
Your Committee has amended this measure by:
(1) Specifying that an employer shall be subject to a monetary penalty if the employer wilfully fails to furnish a wage and tax statement to an employee by the due date; and
(2) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure.
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. 1196, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 1196, S.D. 2.
Respectfully submitted on behalf of the members of the Committee on Ways and Means,
DONOVAN M. DELA CRUZ, Chair