STAND. COM. REP. NO. 2371

Honolulu, Hawaii

RE:    S.B. No. 2693

       S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Eighth State Legislature

Regular Session of 2016

State of Hawaii

Sir:

     Your Committees on Tourism and International Affairs and Commerce, Consumer Protection, and Health, to which was referred S.B. No. 2693 entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

beg leave to report as follows:

     The purpose and intent of this measure is to allow transient accommodations brokers to register as tax collection agents to collect and remit general excise and transient accommodations taxes on behalf of operators and plan managers using their services.

     Your Committees received testimony in support of this measure from the Department of Taxation, Airbnb, Hawaii Lodging & Tourism Association, Rental By Owner Awareness Association, and numerous individuals.  Your Committees received testimony in opposition to this measure from Unite Here Local 5.  Your Committees received comments on this measure from the County of Kauai Office of the Prosecuting Attorney, County of Kauai Department of Planning, 17 Palms Kauai, and Tax Foundation of Hawaii.

     Your Committees find that allowing a private person to act as a tax collection agent is likely to ease the burden of collecting taxes.  As an example, section 237-9, Hawaii Revised Statutes, allows a person engaged in network marketing, multi-level marketing, or other similar business to enter into an agreement with the Department of Taxation to act as a tax collection agent on behalf of its direct sellers.  Your Committees find that similarly allowing a transient accommodations broker to act as a tax collection agent on behalf of providers of transient accommodations that utilize the services of the transient accommodations broker may facilitate the collection of transient accommodations taxes and general excise taxes.

     Your Committees have amended this measure by making a technical, nonsubstantive amendment for the purposes of clarity and consistency.

     As affirmed by the records of votes of the members of your Committees on Tourism and International Affairs and Commerce, Consumer Protection, and Health that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 2693, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 2693, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committees on Tourism and International Affairs and Commerce, Consumer Protection, and Health,

________________________________ ROSALYN H. BAKER, Chair

________________________________ J. KALANI ENGLISH, Majority Leader