Status of 2018 Legislative Tax Measures

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Below is our list of 2018 Legislative Tax Measures.

The first page of the list is the list of bills introduced by the Executive Branch.  These are organized by agency:

  • BED = Dept. of Business, Economic Development, and Tourism
  • BUF = Dept. of Budget and Finance
  • CCA = Dept. of Commerce and Consumer Affairs
  • PSD = Dept. of Public Safety
  • TAX = Dept. of Taxation
  • TRN = Dept. of Transportation

Subsequent pages in the list are organized by tax type, and within tax type by bill number.

Numbers in strikethrough text are measures that appear to be dead, either because they missed a deadline or because they were deferred by a committee hearing the measure.  However, no measure is permanently dead until the legislative session adjourns.

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SB 2910, HD-1

Miscellaneous

SUBJECT:  MISCELLANEOUS, Establish GEMS Sub-Fund to Loan to State Agencies

BILL NUMBER:  SB 2910, HD-1

INTRODUCED BY: House Committee on Energy & Environmental Protection

EXECUTIVE SUMMARY:  Creates a $50,000,000 revolving line of credit sub-fund under the umbrella of the Green Energy Market Securitization (GEMS) loan fund for any state agency or department to finance energy efficiency measures.  If the GEMS program is to be allowed to live, it must be able to make loans at commercially reasonable rates at commercially reasonable terms.  If loans are to be repaid out of reduced utility costs, what happens if the utility rates go up and the reduction in utility costs fails to materialize?

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SB 2922, SD-1

Real Property (HRS 246), Transient Accommodations Tax (HRS 237D)

SUBJECT:  REAL PROPERTY, TRANSIENT ACCOMMODATIONS, Education Surcharge on Residential Investment Properties and Visitor Accommodations

BILL NUMBER:  SB 2922, SD-1

INTRODUCED BY:  Senate Committee on Judiciary

EXECUTIVE SUMMARY:  Constitutional amendment to allow the legislature to impose a surcharge on real property tax for residential investment property, and on transient accommodations.  We question why this type of increase is being sought given that the Department of Education already has a gargantuan share of the State budget but is still beset with such issues as frustrated teachers and students roasting in our classrooms.  Limits should be written into the amendment or the voters should be apprised that they are voting only on granting power to the legislature to impose a state level real property tax surcharge, with no limitations on that power.

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SB 2654, HD-1

Tobacco (HRS 245)

SUBJECT:  TOBACCO, Prohibits shipment of tobacco products, adds electronic smoking devices, hikes rates and fees

BILL NUMBER:  SB 2654, HD-1

INTRODUCED BY:  House Committee on Health & Human Services

EXECUTIVE SUMMARY:  Prohibits shipment of tobacco products to anyone other than a licensee.  Includes e-liquid within the definition of “tobacco products”, as used in the cigarette tax and tobacco tax law, thereby making all provisions of the cigarette tax and tobacco tax law that relate to tobacco products applicable to e-liquid as well.  Increases the license fees and taxes on cigarettes and tobacco products.

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HB 2432, Proposed SD-1

Transient Accommodations Tax (HRS 237D)

SUBJECT:  TRANSIENT ACCOMMODATIONS, Applies Tax to Resort Fees, Attaches Liability to Intermediary, Increases Transient Occupancy Tax

BILL NUMBER:  HB 2432, Proposed SD-1

INTRODUCED BY:  Senate Committee on Ways and Means

EXECUTIVE SUMMARY:  Imposes the transient accommodations tax on additional hotel resort fees that are calculated separately from the advertised transient accommodation’s rate.  Because of additional language in the “gross rental” definition excluding fees unrelated to the transient accommodations, this appears to be a technical clarification.

Clarifies that the transient accommodations tax shall be calculated based on the gross rental price paid by a visitor.  Specifies that the transient accommodations tax is to be collected from operators or transient accommodations intermediaries that collect whole or partial payment for transient accommodations.  Trying to expand the tax base in such a manner may have the unintended effect of discouraging those who would like to bring tourists to Hawaii and take care of them here.

Increases tax on timeshare units by increasing the tax base from half of the gross daily maintenance fee to an unspecified percentage.  The definition of the taxable base was adjusted three years ago, and at that time the legislature declined to change the percentage against the Department of Taxation’s recommendation.  Justification for increasing the percentage now is questionable given that history.

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HB 207, Proposed SD-1

Conveyance (HRS 247), Estate & Generation Skipping Transfer ( HRS 236E)

SUBJECT:  CONVEYANCE, ESTATE, Tax Hikes

BILL NUMBER:  HB 207, Proposed SD-1

INTRODUCED BY:  Senate Committee on Ways and Means

EXECUTIVE SUMMARY:  Increases estate taxes for Hawaii net taxable estates valued at over $10,000,000.  Raises the conveyance tax rates for residential investment properties with a value of at least $2,000,000.

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HB 2587, HD-1, SD-1

Miscellaneous

SUBJECT:  MISCELLANEOUS, Extends Period for Counties to Opt-In on GET Surcharge

BILL NUMBER:  HB 2587, HD-1, SD-1

INTRODUCED BY:  Senate Committees on Transportation & Energy

EXECUTIVE SUMMARY:  Extends the period by three months that a county may adopt a surcharge on state tax, under certain conditions, from March 31, 2018, to June 30, 2018.  Allows Neighbor Island counties additional flexibility in using surcharge money and requires that at most 2% of the money be used on roads.  Both the additional flexibility and the restriction may be constitutionally problematic.

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HB 2601, HD-1, SD-1

Rental Motor Vehicle and Tour Vehicle Surcharge (HRS 251)

SUBJECT:  RENTAL MOTOR VEHICLE AND TOUR VEHICLE SURCHARGE, New Surcharge for County Road Improvements

BILL NUMBER:  HB 2601, HD-1, SD-1

INTRODUCED BY:  Senate Committees on Transportation and Energy and Commerce, Consumer Protection, and Health

EXECUTIVE SUMMARY:  Establishes an additional rental motor vehicle surcharge of $2 per day for those who rent motor vehicles without a valid Hawaii driver’s license.  The increment is to be deposited into the state highway fund but is to be used in the county in which the moneys are generated.

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HB 2703, HD-1, SD-1

Conveyance (HRS 247), Net Income (HRS 235)

SUBJECT:  CONVEYANCE, INCOME, Earmark Conveyance Tax to Feed Rental Assistance Revolving Fund, Make EITC Refundable, Increase Low-Income Household Renters Credit

BILL NUMBER:  HB 2703, HD-1, SD-1

INTRODUCED BY:  Senate Committee on Housing

EXECUTIVE SUMMARY: (1) Allocates a portion of the conveyance tax revenues to the rental assistance revolving fund to be used to subsidize rents for persons who meet certain income requirements; (2) Increases the income tax credit for low-income household renters to an unspecified amount; and (3) Makes the state earned income tax credit refundable and changes the amount of the credit to an unspecified percentage of the federal earned income tax credit.

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