The Tax Foundation of Hawaii is your eye on state taxes. We educate and encourage the efficient and effective use of public funds (our tax dollars) to operate government and deliver public services. To do that, we conduct extensive research and analysis of city, county, and state finance, budgets, and tax systems, and we track changes in tax law and how taxpayer dollars are used.
Our work is published and distributed as widely as possible and free of charge. A well-informed public (and this includes lawmakers) that understands the impact of our tax system can more effectively participate in pressing for greater government efficiency and accountability. That way we know our tax dollars are well spent.
Efforts in Hawaii to form an organization similar to the Foundation reach back to 1929, the year of the infamous stock market crash that plunged America into the Great Depression. We were founded in 1953, at a time when government grew larger and more complicated and the tax system to finance it also mushroomed in size and complexity. With the government we now have, it’s often hard to tell whether we’re getting our money’s worth. That’s not just your CPA’s problem, because the payment going with that return is coming out of your pocket.
Who we are!
Here are some things we helped enact (or kill) in the 2015 legislative session:
- Top tax rates. Hawaii has the second highest individual income tax rate in the nation, 11%, but the top rate is scheduled to sunset at the end of 2015. As bills to give the top rates additional life moved through the session, we reminded lawmakers that their counterparts in 2009 promised the public that the increases would be temporary. At the end, no bill to extend the rates survived, and the top rates of 9%, 10%, and 11% will sunset on schedule.
- Rail tax extension. City officials came to the session wanting the tax to be extended forever and to serve as an operating subsidy as they believed a large portion of the tax is paid by tourists. We testified that the tax historically was intended to pay for capital costs and never was intended for operations. Ultimately, a five-year extension was enacted to help the City finish the job it started. The bill was signed into law on July 15 and became Act 240 of 2015.
- SB 1212. The Foundation drafted a bill to clean up some of the tax laws by getting rid of obsolete provisions. That bill has become Act 22 of 2015.
- Medical marijuana 25% tax. The last committee to hear the bill establishing medical marijuana dispensaries slapped a 25% general excise tax on sales of the drug. We went to the media and Hawaii News Now aired an interview with the President pointing out that prescribed medicines have been exempt from the tax since 1986. Interestingly, the final draft of the bill dropped the taxing provisions. That bill was signed into law on July 15 and became Act 241 of 2015.