Category Archives: Use (HRS 238)

SB 2586

SUBJECT:  GENERAL EXCISE, USE, Increase tax rate, disposition for department of education

BILL NUMBER:  SB 2586

INTRODUCED BY:  KIDANI

EXECUTIVE SUMMARY:  Increases the general excise tax by 1% and provides that the revenue generated by the increased rate will be used for department of education operations, including salaries and maintenance costs.  With a tax increase of this magnitude, economic ripple effects are likely to be enormous because of the all-encompassing nature of the tax.  We also question why such a massive 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.

Continue reading SB 2586

SB 2502; HB 2028 (Identical)

SUBJECT:  GENERAL EXCISE, INCOME, USE, Exemptions/Credits for Clean Energy

BILL NUMBER:  SB 2502, HB 2028 (Identical)

INTRODUCED BY:  WAKAI, INOUYE, Slom

EXECUTIVE SUMMARY:  Exempts personal income tax income, general excise tax income, and use tax income in an amount up to an unspecified percentage of the costs of construction and operation of projects entered into under a public-private partnership with the ERS to improve water infrastructure or water supply, or to promote clean energy. Authorizes ERS investments in such public-private partnerships.  This strategy dodges procurement laws and budgeting, increases risk to ERS assets, and may even be prohibited by ERISA.

Continue reading SB 2502; HB 2028 (Identical)

SB 727; HB 1253 (Identical)

SUBJECT: GENERAL EXCISE, USE, MISCELLANEOUS, Long term care surcharge on state tax

INTRODUCED BY: SB by Baker, Chun Oakland, Green and 3 Democrats; HB by Ito, Hashem, Oshiro, Takayama

EXECUTIVE SUMMARY: This bill establishes a long-term care surcharge of 0.5% onto the state general excise and use tax which would be used as a dedicated source of funding to provide defined benefits for long-term care costs. The funding mechanism is a hike in an already regressive tax, and we can expect an experience similar to that we are having under the Honolulu county surcharge. The result is a defined benefit plan, presumably to cover all residents of the state who need long-term care; we can expect an experience similar to that we are having under ERS. Implementation of this idea could result in an unmitigated disaster. Continue reading SB 727; HB 1253 (Identical)

SB 2761, SD-2

SUBJECT: GENERAL EXCISE, USE, MISCELLANEOUS, County surcharge on state tax for road maintenance and repair

INTRODUCED BY: Senate Committee on Ways and Means

EXECUTIVE SUMMARY: This bill allows each of the counties, except Honolulu, to establish a county surcharge of 0.5% onto the state general excise and use tax which would be used for the maintenance or repair cost of disputed roads and expenses in complying with the Americans with Disabilities Act of 1990 relating to such roads. All of the counties, except Honolulu, must adopt an ordinance establishing the surcharge in order for the surcharge to take effect.

This measure, simply put, would result in a tax increase for those on the Neighbor Islands. Although the bill says the surcharge is temporary, tax increases tend to take on a life of their own and it becomes very hard to kill them off. In addition, this may set a precedent for other agencies to come in and request taxing authority just as the Department of Education did some years ago. Continue reading SB 2761, SD-2

SB 2761, SD-1

SUBJECT: GENERAL EXCISE, USE, MISCELLANEOUS, County surcharge on state tax for road maintenance and repair

INTRODUCED BY: Senate Committees on Transportation and International Affairs, Public Safety, Intergovernmental and Military Affairs and Judiciary and Labor

BRIEF SUMMARY: Adds a new section to HRS chapter 46 to allow each county, other than a county that has established a county surcharge on state tax, to establish a surcharge of 0.5% on the state’s general excise tax under HRS chapter 237 and the use tax under HRS chapter 238. The surcharge shall be imposed by ordinance provided a county has held a public hearing on the proposed ordinance. Requires a county electing to impose the surcharge to notify the director of taxation within ten days after the county adopts the surcharge and requires the director to levy, assess, collect and administer the county surcharge tax no earlier than January 1, ____. The surcharge shall be used for maintenance or repair cost of disputed roads and expenses in complying with the Americans with Disabilities Act of 1990 relating to such roads.

If an ordinance to impose an additional county surcharge on the state tax is adopted by December 31, _______; the ordinance shall be repealed on December 31, 2022; and sections of this act adopting the surcharge shall be repealed on December 31, 2022. Continue reading SB 2761, SD-1

HB 1651

SUBJECT: USE, Taxation of out-of-state businesses

INTRODUCED BY: Choy

BRIEF SUMMARY: Adds a new section, paragraph (g), to HRS section 238-6 to provide that the use tax shall not be collected by a seller engaged in business in the state if: (1) the seller can demonstrate that the person in the state with whom the seller has an agreement did not engage in referrals in the state on behalf of the seller that would satisfy the requirements of the commerce clause of the U.S. Constitution; (2) the person in the state with whom the seller has an agreement did not engage in any activity within the state that was significantly associated with the seller’s ability to establish or maintain the seller’s market in the state during the preceding twelve months. Continue reading HB 1651

HB 2614

SUBJECT: GENERAL EXCISE, USE, Exempt space launch facility

INTRODUCED BY: Ward, Brower, Creagan, Hanohano and 2 Democrats and 2 Republicans

BRIEF SUMMARY: Adds a new section to HRS chapter 237 to exempt from the general excise tax the amounts received from the construction of a space launch facility in the state. Defines “construction of a space launch facility,” “space flight” and “space launch facility” for purposes of the measure.

Adds a new section to HRS chapter 238 to provide that the use tax shall not be applicable to the use of material, parts, or tools imported or purchased by a person licensed under HRS chapter 237 that are used for the construction of a space launch facility. Continue reading HB 2614

SB 2761; HB 1728 (Identical)

SUBJECT: GENERAL EXCISE, USE, MISCELLANEOUS, County surcharge on state tax for road maintenance and repair

INTRODUCED BY: SB by Keith-Agaran, Baker, English, Ruderman, Tokuda; HB by Souki & Yamane

BRIEF SUMMARY: Adds a new section to HRS chapter 46 to allow each county to establish a surcharge of 0.5% on the state’s general excise tax under HRS chapter 237 and the use tax under HRS chapter 238. The surcharge shall be imposed by ordinance provided a county has held a public hearing on the proposed ordinance. Requires a county electing to impose the surcharge to notify the director of taxation within ten days after the county adopts the surcharge and requires the director to levy, assess, collect and administer the county surcharge tax no earlier than January 1, ____. The surcharge shall be used for operating costs of public transportation within each county for public transportation systems, including public roadways or highways, public buses, trains, ferries, pedestrian paths or sidewalks, or bicycle paths; and expenses in complying with the Americans with Disabilities Act of 1990.

If an ordinance to impose an additional county surcharge on the state tax is adopted by December 31, _______; the ordinance shall be repealed on December 31, 2022; and sections of this act adopting the surcharge shall be repealed on December 3, 2022. Continue reading SB 2761; HB 1728 (Identical)