STAND. COM. REP. NO.  1399


Honolulu, Hawaii

                , 2021


RE:   S.B. No. 320

      H.D. 1





Honorable Scott K. Saiki

Speaker, House of Representatives

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii




     Your Committee on Consumer Protection & Commerce, to which was referred S.B. No. 320 entitled:




begs leave to report as follows:


     The purpose of this measure is to require each tax return preparer to:


     (1)  Have a valid preparer tax identification number issued by the Internal Revenue Services; and


     (2)  Include the valid preparer tax identification number on any return or claim for refund prepared for compensation as required by the Department of Taxation.


     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.


     Your Committee finds that many tax return preparers in Hawaii operate with little State oversight or accountability.  This measure will ensure that tax return preparers are held accountable for the returns they prepare by requiring all tax return preparers to have a preparer tax identification number and include it on any return or claim for refund.

     Your Committee further finds that continuing education requirements ensure that professionals are knowledgeable of the latest best practices.  Several states, including California, Iowa, Maryland, New York, and Oregon, require continuing education for tax return preparers.  Your Committee finds that this is an additional and appropriate method of ensuring that tax return preparers have some competence in preparing tax returns.


     Your Committee has amended this measure by:


     (1)  Establishing a continuing education requirement of four hours in a calendar year, beginning with calendar year 2022;


     (2)  Specifying that the continuing education courses must be approved by the Board of Public Accountancy;


     (3)  Requiring the Board of Public Accountancy to adopt rules regarding continuing education, including compliance procedures and penalties for violations;


     (4)  Changing the effective date to January 1, 2050, to encourage further discussion; and


     (5)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.


     As affirmed by the record of votes of the members of your Committee on Consumer Protection & Commerce that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 320, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 320, H.D. 1, and be referred to your Committee on Finance.



Respectfully submitted on behalf of the members of the Committee on Consumer Protection & Commerce,