On this page we present a recap of some of the things the Foundation has done over the years.
- Strongly supported lifting the deduction cap for charitable donations for higher-income taxpayers.
- Testified again against tax on sugary drinks as previously mentioned in other years that sugary drinks are not the sole cause of obesity.
- Spoke out against bag fee to raise funds to protect watershed as the fee would only increase the cost of living and doing business in Hawaii.
- Supported the repeal of the state educational facilities improvement special fund as a way to return accountability of financing of school repairs and maintenance back to the legislature.
- Pointed out to legislators that the proposal to make the 9.25% transient accommodations rate permanent is reneging of a promise made by the legislature to the visitor industry that this increase would only be temporary for a few years to help balance the budget during difficult economic times.
- Advised against a 10 cent state bag fee since the counties already have it, the fee may result in a “money grab” down the road.
- Resisted two new tax credits for qualified agricultural land and livestock feed as there was no indicator of financial or economic need for these tax breaks.
- Warned against many proposed tax checkoffs on income tax form for various agencies and nonprofits as they add to the cost of the tax department’s administration and cost taxpayer dollars to administer and track these designated refund checkoffs.
- Resisted the move to increase the invasive species inspection fee reporting that it is another increase in a special fund that did not have accurate accounting figures and could not describe why there was a need to increase the fee from its current rate.
- Supported the measure to repeal certain unused and underused special funds and to return any existing amounts in these funds back into the general fund. The Foundation concurred with the efforts of the legislature stating that this was a first step in regaining control over state finances.
- Testified against the proposed $10 tax on complimentary transient accommodations.
- Advised against raising the rental motor vehicle and tour vehicle surcharge with proceeds to go into the general fund as this surcharge was initially enacted to help the rental car industry build a coordinated rental vehicle facility.
- Again advised against increasing the GET and eliminating GET exemptions and instead move special fund revenue from some of the 138 special funds back into the general fun and scale back high technology and other tax credits.
- Pointed out that the proposal to double the tax on alcoholic beverages will cause bar owners to raise prices and if they don’t have enough volume, they cannot hire additional workers or stay in business.
- In response to the tax on sugary drinks, pointed that sugary drinks are not the only reason for obesity.
- Advised against a 10 cent state bag fee since the counties already have it, the fee may result in a “money grab” down the road.
- Resisted two new tax credits for qualified agricultural land and livestock feed as there was no indicator of financial or economic need for these tax breaks.
- Warned against many proposed tax checkoffs on income tax form for various agencies and nonprofits as they add to the cost of the tax department’s administration and cost taxpayer dollars to administer and track these designated refund checkoffs.
- Resisted increase in conveyance tax to automatically fund special fund to help homeless as there is no direct link between buying and selling a home and being homeless and because the conveyance tax in not a reliable source of income as it rises and falls with the amount of activity in the real estate market.
- Decried the raiding of special funds to bolster general fund. Called for repealing unnecessary special funds and returning moneys to general fund so all stakeholders will know how much money is actually available to fund state programs.
- Reported that proposed anti-speculation capital gains tax would scare off much needed investors to Hawaii and make the creation of affordable housing even more difficult.
- Explained that limiting itemized deductions for so-called high income taxpayers would have disastrous effect particularly for nonprofits as taxpayers would scale back on personal donations to nonprofit organizations.
- Advised against increasing the GET from 4% to 5% and the wholesale rate from 0.5% to 1%.
- Pointed out that any increase in the barrel tax will increase the cost of groceries to the consumer and the consumer will not know who to blame since the tax is imposed at the front end of the consumption chain.
- Advised against a blanket elimination of all GET exemptions since the elimination may violate interstate commerce and other laws.
- Likened the proposal of the Hawaii innovations partnership special fund of $100 million in general revenues to the fatal strategies of the early 1990’s to create special fund repositories.
- Consistently educated city council and public that shifting property tax burden from homeowners to business not only raises the cost of doing business and therefore the cost of goods and services for consumers, but it also the true cost of running city government.
- Pointed out the folly of exempting “responsible businesses” from state income taxation.
- Reminded administration officials and legislators that Hawaii has already adopted a “combat pay” income tax exemption.
- Supported income tax conformity which minimizes differences in the federal and state income tax laws to lower compliance and administrative costs and in this year the importance of federal changes affecting pension and deferred compensation plans.
- Was first to speak out against the state sponsored plan to establish a $10 month tax for the purpose of underwriting a universal long term care insurance plan called Care Plus.
- Provided key cost information about the hidden impact of adopting a “bottle bill” for Hawaii.
- Instrumental in the drafting and adoption of two telecommunications measures relating to sourcing of wireless telecommunications and the “bundling” of telecommunications services.
- attempted to point out the erroneous interpretation and application of the definition of “cost” with respect to the capital goods excise tax credit.
- Advised against taking TAT funds already earmarked for visitor promotion for use of other programs of state government.
- Advised lawmakers against the use of tax credits to encourage specific and narrow activities such as CPR training, granting family leave, computer recycling, police officers’ income, teachers who purchase classroom supplies, etc.
- Advised against trying to collect the TAT from tour wholesalers upon sale to final consumer.
- Advised against proposal to increase environmental response tax rate on petroleum that was killed.
- Assisted in formulating proposal to share revenues from the state public service company tax with county governments to prevent counties from imposing real property tax on utilities.
- Advised lawmakers that with such a high tax rate on cigarettes, they needed a way to enforce the payment of the tax with the use of tax stamps as is found on the mainland; was finally adopted after two previous attempts resulting in added tax collections of $13 million in the first six months.
- GET pyramiding on services alleviated with the Foundation providing much of the behind the scene redrafting and perfecting of the bill. Advised business community on strategies for the successful adoption of depyramiding.
- Supported a proposal to provide that all intermediary sales treated as wholesale sales.
- Assisted in the enactment of the measure providing for the wholesale tax treatment of sales of packaged condiments and tangible personal property incorporated into finished product.
- Against proposal to turn over authority to impose state income tax to board of education.
- Advised against proposal to impose ad valorem tax on motor vehicles.
- Advised against proposal to impose 4% transfer tax on used motor vehicles by individuals formerly treated as casual sales.
- Income tax rate cuts, bracket adjustments after years of testimony by the Foundation that income tax rates were too high (dating back at least to 1987).
- Proposal to increase GET rate to 5.35% defeated.
- Exemption from GET for sale of tangible personal property imported into the state for sale at wholesale finally adopted after being recommended by the 1990 tax review commission.
- Administration-backed repeal of insurance premiums tax “home office” credit failed.
- GET pyramiding on real property leasing and subleasing alleviated, phased in over 7 years.
- Advised that lawmakers should adopt the federal provisions for the deduction of long term care insurance premiums instead of adopting administration’s unique approach to the issue, as a result of the federal provision was not adopted for two years because of the administration’s insistence that its proposal be adopted.
- Clarify exemption of liquor shipped out of state from state liquor tax.
- Pointed out flaws in ERTF (Economic Recovery Task Force) proposals.
- Provided input to 1995-1997 Tax Review Commission recommendations.
- Allowed state to adopt “capital construction fund” provisions for maritime activities despite its caution to the tax department.
- Administration-backed repeal of insurance premiums tax “home office” credit failed.
- After years of advising that the maximum withholding rate was too high which resulted in substantial refunds each spring, lawmakers finally adjusted maximum state personal income tax withholding rate to 8%.
- Criticized House plan to finance DHHL (Department of Hawaiian Home Lands) back rent reimbursements with a 1% temporary increase in the GET.
- Help to stop an increase in environmental response tax on petroleum products by researching the misuse of the earmarked funds including the use of those funds to purchase $4,000 filing cabinets.
- Advised against City & County proposal to repeal real property tax exemption for public utilities.
- Pointed out in newspaper article that state has been spending more money than it had been collecting – Honolulu Advertiser “How We Got in This Budget Mess.”
- Liquor tax rate escalator repealed after years of testimony pointing out the lack of accountability built into this provision which automatically increased liquor tax rates.
- Criticized use of general obligation bond debt for plants and facilities of private, nonprofit organizations in Hawaii.
- Pointed out that Hawaii is a “tax hell” in Maui Inc. magazine.
- Pointed out that growth in state employees has increased dramatically over the years.
- Advised against turning over income taxing powers to board of education.
- Only business organization to testify against the administration-backed long term care income tax surcharge that would have added up to a 0.5% more on net income tax bills. Family Hope measure failed to pass.
- Effort to raise GET on Oahu for rail transit and on Kauai for general purposes defeated; Tax Foundation of Hawaii was an active participant in reviewing the financial plans involving the hike in the GET, demonstrating that the forecast of growth in the GET was overly optimistic, a fact that was borne out over years.
- GET exemption to producers of agricultural products who sell those products to a purchaser which processes the product out of state helped farmers in the state.
- Advised against proposal to allow each county to impose county TAT of up to 9%.
- Advised against proposal to impose no-fault tax in addition to increase in fuel tax, state drivers’ license and renewal fee and motor vehicle registration fees to fund no-fault insurance state program.
- Advised against imposition of 6% tax on hospitals and nursing homes with revenues deposited into health care revolving fund.
- Advised against doubling the conveyance tax and earmarking the increased proceeds for the affordable rental housing fund and the natural area reserve fund.
- Supported repeal of special and revolving funds and return balance to general fund.
- Worked to clarify GET exemption for amounts received by operators of orchard farms from owners of the property which are disbursed by the operator for employee wages, salaries, payroll taxes.
- GET exemption for amounts received by managers or board of directors of nonprofit homeowners or community associations.
- Assisted in mitigating the cost of the GET on porting a marine response vessel in Hawaii.
- Noted that banks and other financial institutions tax overhaul failed to bring the tax rate into parity with the corporate income tax rate.
- Took the unpopular position against 0.25% GET surcharge for educational facilities improvement special fund.
- Clarify the application of the GET on tourism related services sold through travel agencies and tour packagers.
- Provided recurring testimony against various proposals to adopt a tax on land speculation in Hawaii against proposed increase in harbor fees in particular after debt had been issued making the act of public hearings meaningless.
- Pointed out effect of increasing GET by 0.5% to fund mass transit.
- Tax Review Commission report released; Tax Foundation of Hawaii played important role in providing input and shaping proposals and the Commission’s recommendations would continue influencing state tax policy to date; among the policy options developed were general excise tax pyramiding on service and real property leasing activities, income tax rates and brackets, public service company tax revenue sharing with the counties; the Foundation served as a major resource and mentor to the commission staff which recommended many of the Foundation’s suggestions to the Commission.
- Supported the GET application to certain goods sold to cooperative associations and feedlots clarified and granted the wholesale rate.
- Supported the clarification of GET exemption on interest, discount, points, loan fees, loan charges, and finance charges imposed by financial institutions.
- Took the difficult position of advising against proposal to establish general excise and use tax surcharge to finance mass transit at the county level.
- Sole voice to point out the state’s efforts to exceed the constitutional spending limit thereby growing the size of government faster than the economy.
- First to point out how state funds were being mismanaged, with earmarking of tax revenues
- and the more than temporary borrowing of general funds without authorization.
- Advised against the earmarking of $90 million of the general excise tax for the educational facilities special fund.
- Raised the first red flags about the use of special funds to hide excess general funds and spin certain programs off from the general fund.
- Advised against the adoption of a progressive conveyance tax designed to penalize speculators.
- Facilitated the adoption of the general excise tax exemption for transactions between affiliated companies and related entities and common paymasters.
- Assisted in redrafting of the general excise tax exemption for the solid waste resource recovery facility known as H-Power.
- Urged that personal and corporate income tax rates be lowered more than the administration had proposed rather than using the flat $50 Food tax Credit to offset the base broadening of the effects of the 1986 Federal Tax Reform Act.
- Initiated the discussion to include a tax credit for the purchase of capital goods to offset the cost of the 4% general excise tax on those purchases.
- Argued that tax rate on capital gains should be lowered substantially since ordinary income tax rates were not adjusted sufficiently to match rate reductions at the federal level.
- Assisted with the effort to understand, clarify, and streamline the recently enacted transient accommodations tax (TAT) which resulted in legislation in the subsequent session.
- Assisted in conversion of the liquor tax from an ad valorem basis to the per gallon approach; undertook the confidential survey which provided the basis for determining the categorical rates.
- Facilitated the establishment of the apportionment formula for the general excise tax for long distance telecommunications.
- Objected to the adoption of a 6% general excise tax rate as a means of replacing the resources of the real property tax for the counties.
