Bill Text: HI HB2781 | 2024 | Regular Session | Introduced
Bill Title: Relating To Taxation.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced) 2024-02-27 - The committee(s) on FIN recommend(s) that the measure be deferred. [HB2781 Detail]
Download: Hawaii-2024-HB2781-Introduced.html
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HOUSE OF REPRESENTATIVES |
H.B. NO. |
2781 |
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THIRTY-SECOND LEGISLATURE, 2024 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
relating to taxation.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. The legislature finds that Act 247, Session Laws of Hawaii 2005, established the county surcharge on state tax to provide an initial funding source for certain county transportation projects. Subsequently, Act 48, Session Laws of Hawaii 2023, amended the county surcharge on state tax to allow the funding of housing infrastructure. The county surcharge on state tax is scheduled to be repealed on December 31, 2030. The legislature notes that the counties will have six years to find alternative revenue sources to support programs that are currently funded by the county surcharge on state tax.
The purpose of this Act is to, upon the repeal of the county surcharge on state tax, establish a successor surcharge on the general excise and use taxes to provide:
(1) Funding for statewide universal preschool;
(2) Supplemental funding to the department of education for K-12 school purposes; and
(3) Funding for the provision of social services in the State.
SECTION 2. Section 237-8.6, Hawaii Revised Statutes, is amended to read as follows:
"§237-8.6 [County
surcharge] Surcharge on [state] general excise tax;
administration. (a) [The
county] Beginning January 1, 2031, a surcharge on [state
tax, upon the adoption of county ordinances and in accordance with the
requirements of section 46-16.8,] the taxes imposed under this chapter
shall be levied, assessed, and collected as provided in this section on all
gross proceeds and gross income taxable under this chapter. [No county shall set the] The
surcharge [on state tax at a] rate [greater than] shall be
equal to one-half per cent of all gross proceeds and gross income taxable
under this chapter. All provisions of
this chapter shall apply to the [county] surcharge [on state tax]. With respect to the surcharge, the director
of taxation shall have all the rights and powers provided under this
chapter. In addition, the director of
taxation shall have the exclusive rights and power to determine the county or counties
in which a person is engaged in business and, in the case of a person engaged
in business in more than one county, the director shall determine, through
apportionment or other means, that portion of the surcharge on state tax
attributable to business conducted in each county.
[(b)
Each county surcharge on state tax that may be adopted, extended, or
amended pursuant to section 46-16.8 shall be levied beginning in a taxable year
after the adoption of the relevant county ordinance; provided that no surcharge
on state tax may be levied:
(1) Before:
(A) January
1, 2007, if the county surcharge on state tax was established by an ordinance
adopted before December 31, 2005;
(B) January
1, 2019, if the county surcharge on state tax was established by the adoption
of an ordinance after June 30, 2015, but before June 30, 2018;
(C) January
1, 2020, if the county surcharge on state tax was established by the adoption
of an ordinance on or after June 30, 2018, but before March 31, 2019;
(D) January 1, 2024, if the county surcharge on
state tax was established by the adoption of an ordinance on or after March 31,
2019, but before August 1, 2023; or
(E) January 1, 2025, if the county surcharge on
state tax was established by the adoption of an ordinance on or after August 1,
2023, but before December 31, 2023; and
(2) After December
31, 2030.
(c)] (b) The [county] surcharge on [state]
general excise tax[, if adopted,] shall be imposed on the gross
proceeds or gross income of all written contracts that require the passing on
of the taxes imposed under this chapter; provided that if the gross proceeds or
gross income are received as payments beginning in the taxable year in which
the taxes become effective, on contracts entered into before June 30 of the
year prior to the taxable year in which the taxes become effective, and the
written contracts do not provide for the passing on of increased rates of
taxes, the [county] surcharge [on state tax] shall not be imposed
on the gross proceeds or gross income covered under the written contracts. The [county] surcharge [on state
tax] shall be imposed on the gross proceeds or gross income from all
contracts entered into on or after June 30 of the year prior to the taxable
year in which the taxes become effective, regardless of whether the contract
allows for the passing on of any tax or any tax increases.
[(d)
No county] (c) The
surcharge on [state] general excise tax shall [be established
on] not apply to any:
(1) Gross
income or gross proceeds taxable under this chapter at the one-half per cent
tax rate;
(2) Gross
income or gross proceeds taxable under this chapter at the 0.15 per cent tax
rate; or
(3) Transactions,
amounts, persons, gross income, or gross proceeds exempt from tax under this
chapter.
[(e)] (d) The director of taxation shall revise the
general excise tax forms to provide for the clear and separate designation of
the imposition and payment of the [county] surcharge on [state] general
excise tax.
[(f)] (e) The taxpayer shall designate the taxation
district to which the [county] surcharge on [state] general
excise tax is assigned in accordance with rules adopted by the director of
taxation under chapter 91. The taxpayer
shall file a schedule with the taxpayer's periodic and annual general excise
tax returns summarizing the amount of taxes assigned to each taxation district.
[(g)] (f) The penalties provided by section 231-39 for
failure to file a tax return shall be imposed on the amount of surcharge due on
the return being filed for the failure to file the schedule required to
accompany the return. In addition, there
shall be added to the tax an amount equal to ten per cent of the amount of the
surcharge and tax due on the return being filed for the failure to file the
schedule or the failure to correctly report the assignment of the general
excise tax by taxation district on the schedule required under this subsection.
[(h)] (g) All taxpayers who file on a fiscal year basis
whose fiscal year ends after December 31 of the year prior to the taxable year
in which the taxes become effective, shall file a short period annual return
for the period preceding January 1 of the taxable year in which the taxes
become effective. Each fiscal year
taxpayer shall also file a short period annual return for the period starting
on January 1 of the taxable year in which the taxes become effective, and
ending before January 1 of the following year."
SECTION 3. Section 238-2.6, Hawaii Revised Statutes, is amended to read as follows:
"§238-2.6
[County surcharge] Surcharge
on [state] use tax; administration. (a) [The
county] Beginning January 1, 2031, a surcharge on [state tax,
upon the adoption of a county ordinance and in accordance with the requirements
of section 46-16.8,] the taxes imposed under this chapter shall be
levied, assessed, and collected as provided in this section on the value of
property and services taxable under this chapter. [No county shall set the] The
surcharge [on state tax at a] rate [greater than] shall be
equal to one-half per cent of the value of property taxable under this
chapter. All provisions of this chapter
shall apply to the [county] surcharge [on state tax]. With respect to the surcharge, the director
shall have all the rights and powers provided under this chapter. In addition, the director of taxation shall
have the exclusive rights and power to determine the county or counties in
which a person imports or purchases property and, in the case of a person
importing or purchasing property in more than one county, the director shall
determine, through apportionment or other means, that portion of the surcharge [on
state tax] attributable to the importation or purchase in each county.
[(b)
Each county surcharge on state tax that may be adopted, extended, or
amended shall be levied beginning in a taxable year after the adoption of the
relevant county ordinance; provided that no surcharge on state tax may be
levied:
(1) Before:
(A) January
1, 2007, if the county surcharge on state tax was established by an ordinance
adopted before December 31, 2005;
(B) January
1, 2019, if the county surcharge on state tax was established by the adoption
of an ordinance after June 30, 2015, but before June 30, 2018;
(C) January
1, 2020, if the county surcharge on state tax was established by the adoption
of an ordinance on or after June 30, 2018, but before March 31, 2019;
(D) January 1, 2024, if the county surcharge on
state tax was established by the adoption of an ordinance on or after March 31,
2019, but before August 1, 2023; or
(E) January 1, 2025, if the county surcharge on
state tax was established by the adoption of an ordinance on or after August 1,
2023, but before December 31, 2023; and
(2) After December
31, 2030.
(c)
No county] (b) The surcharge on [state] use
tax shall [be established upon] not apply to any use taxable
under this chapter at the one-half per cent tax rate or upon any use that is
not subject to taxation or that is exempt from taxation under this chapter.
[(d)] (c) The director of taxation shall revise the use
tax forms to provide for the clear and separate designation of the imposition
and payment of the [county] surcharge on [state] use tax.
[(e)] (d) The taxpayer shall designate the taxation
district to which the [county] surcharge on [state] use
tax is assigned in accordance with rules adopted by the director of taxation
under chapter 91. The taxpayer shall
file a schedule with the taxpayer's periodic and annual use tax returns
summarizing the amount of taxes assigned to each taxation district.
[(f)] (e) The penalties provided by section 231-39 for
failure to file a tax return shall be imposed on the amount of surcharge due on
the return being filed for the failure to file the schedule required to
accompany the return. In addition, there
shall be added to the tax an amount equal to ten per cent of the amount of the
surcharge and tax due on the return being filed for the failure to file the
schedule or the failure to correctly report the assignment of the use tax by
taxation district on the schedule required under this subsection.
[(g)] (f) All taxpayers who file on a fiscal year basis
whose fiscal year ends after December 31 of the year prior to the taxable year
in which the taxes become effective, shall file a short period annual return
for the period preceding January 1 of the taxable year in which the taxes
become effective. Each fiscal year
taxpayer shall also file a short period annual return for the period starting
on January 1 of the taxable year in which the taxes become effective, and
ending before January 1 of the following year."
SECTION 4. Act 247, Session Laws of Hawaii 2005, as amended by Act 240, Session Laws of Hawaii 2015, as amended by Act 1, First Special Session Laws of Hawaii 2017, is amended by amending section 9 to read as follows:
"SECTION 9. This Act shall take effect upon its approval;
provided that:
(1) If
none of the counties of the State adopt an ordinance to levy a county surcharge
on state tax by December 31, 2005, this Act shall be repealed and section
437D-8.4, Hawaii Revised Statutes, shall be reenacted in the form in which it
read on the day prior to the effective date of this Act;
(2) If
any county does not adopt an ordinance to levy a county surcharge on state tax
by December 31, 2005, it shall be prohibited from adopting such an ordinance
pursuant to this Act, unless otherwise authorized by the legislature through a
separate legislative act; and
(3) If
an ordinance to levy a county surcharge on state tax is adopted by December 31,
2005:
(A) The
ordinance shall be repealed on December 31, 2022; provided that the repeal of
the ordinance shall not affect the validity or effect of an ordinance to extend
a surcharge on state tax adopted pursuant to an act of the legislature; and
(B) [This]
Sections 2, 5, and 6 of this Act shall be repealed on December 31, 2030,
and section 437D‑8.4, Hawaii Revised Statutes, shall be reenacted in the
form in which it read on the day prior to the effective date of this Act;
provided that the amendments made to section 437D-8.4, Hawaii Revised Statutes,
by Act 226, Session Laws of Hawaii 2008, as amended by Act 11, Session
Laws of Hawaii 2009, and Act 110, Session Laws of Hawaii 2014, shall not be
repealed."
SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 6. This Act shall take effect on January 1, 2031.
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INTRODUCED
BY: |
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Report Title:
Surcharge on General Excise Tax; Surcharge on Use Tax
Description:
Establishes a surcharge on general excise and use taxes. Effective 1/1/2031.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.
