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Tax Foundation of Hawaii v. State of Hawaii – The Documents

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Lawsuit Challenging 10% Skimmed by State from Honolulu Rail Surcharge Dismissed; Foundation Vows to Continue Fight

HONOLULU, HAWAII–March 23, 2016–Today, Judge Edwin Nacino of the First Circuit Court dismissed the lawsuit by the Tax Foundation of Hawaii, a nonprofit taxpayer watchdog organization, that sought to halt the State’s practice of skimming tens of millions of dollars each year from the amounts collected for the Oahu rail surcharge.
Judge Nacino ruled that this case was a controversy with respect to taxes, so declaratory and injunctive relief was precluded by HRS § 632-1.  He further held that the court rules (Rule 81.1, Hawaii Rules of Civil Procedure) denied to the circuit courts the power to give any relief against any State agency.  He also said he thinks the statute allows the state to take 10% of the surcharge, regardless what it actually costs to assess, collect and dispose of the funds.  In fact, the Department of Taxation has been covering almost its entire budget on the backs of those who pay the surcharge.
Today, the Tax Foundation of Hawaii reassured those concerned about the impropriety of the state’s diversion of monies—which now involves over $150 million sorely needed for rail construction— that the legal battle is not over.  “Judge Nacino’s ruling doesn’t say that no problem exists, but just says that his court isn’t the one that can fix it,” said Tom Yamachika, President of the Tax Foundation of Hawaii.  “We are currently considering our options with our legal counsel, but we want to let the taxpayers of the State of Hawaii know that our fight on their behalf will continue.”

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