Honolulu, Hawaii



RE:    S.B. No. 1196

       S.D. 1




Honorable Donna Mercado Kim

President of the Senate

Twenty-Seventh State Legislature

Regular Session of 2013

State of Hawaii




     Your Committee on Ways and Means, to which was referred S.B. No. 1196 entitled:




begs leave to report as follows:


     The purpose and intent of this measure is to require businesses to record all cash-based transactions, except casual sales.


     Your Committee received testimony in support of this measure from the Department of Taxation.


     Your Committee received comments on this measure from the Tax Foundation of Hawaii.


     Section 231-96, Hawaii Revised Statutes, requires a person who conducts more than ten taxable business transactions per day to offer a receipt or other record of the transaction and maintain a record of all business transactions conducted each day.  However, your Committee finds that it is possible for taxpayers to conduct less than ten business transactions per day or simply state that the taxpayer has conducted less than ten transactions per day, thereby avoiding the requirement to provide a receipt of the transaction and keep a contemporaneously generated record of the transactions for each day.  Accordingly, your Committee believes that it is necessary to require all taxpayers who conduct cash transactions, with the exception of casual sales, to offer a receipt or other record of the transaction and to maintain a contemporaneously generated record of all business transactions conducted each day.


     Your Committee notes that casual sales or isolated sale transactions involving tangible personal property by a person do not require a general excise tax license and therefore are not subject to the provisions of this measure.


     Your Committee has amended this measure by:


(1)  Amending the effective date to July 1, 2050, to facilitate continuing discussion on the measure; and


(2)  Making technical nonsubstantive amendments for clarity, consistency, and style.


     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, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1196, S.D. 1, and be placed on the calendar for Third Reading.


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