Bill Text: HI SB98 | 2013 | Regular Session | Amended
Bill Title: Reduction of Tax Liability; Low Income Taxpayers
Spectrum: Partisan Bill (Democrat 8-0)
Status: (Engrossed - Dead) 2013-04-23 - Conference committee meeting to reconvene on 04-26-13 3:00PM in conference room 309. [SB98 Detail]
Download: Hawaii-2013-SB98-Amended.html
STAND. COM. REP. NO. 500
Honolulu, Hawaii
RE: S.B. No. 98
S.D. 1
Honorable Donna Mercado Kim
President of the Senate
Twenty-Seventh State Legislature
Regular Session of 2013
State of Hawaii
Madam:
Your Committee on Ways and Means, to which was referred S.B. No. 98 entitled:
"A BILL FOR AN ACT RELATING TO TAXATION,"
begs leave to report as follows:
The purpose and intent of this measure is to reduce the income tax liability of low-income taxpayers.
More specifically, this measure establishes an income tax credit that:
(1) Reduces a person's income tax liability to zero if the person's federal adjusted gross income falls below federal poverty guidelines; or
(2) Reduces a person's income tax liability by fifty per cent if the person's federal adjusted gross income falls between one hundred per cent and one hundred twenty-five per cent of federal poverty guidelines.
Your Committee received testimony in support of this measure from the Hawaii Alliance for Community-Based Economic Development, Catholic Charities Hawaii, PHOCUSED, Hawaii Appleseed Center for Law and Economic Justice, and Partners In Care - Oahu.
Your Committee received comments on this measure from the Department of Taxation and the Tax Foundation of Hawaii.
Your Committee finds that, in comparison to states that impose an income tax, the income threshold at which a state resident becomes subject to the Hawaii income tax is one of the lowest in the nation. This measure establishes a tax credit to provide a means of reducing or eliminating the income tax liability of low-income taxpayers. However, your Committee also finds that, as currently drafted, the new tax credit requires significant additional calculations and steps that would make it more difficult to claim the credit or evaluate the validity of a claim for the credit.
Your Committee has amended this measure by:
(1) Deleting the provision establishing a new income tax credit and replacing it with a provision that amends the existing refundable food/excise tax credit (section 235-55.85, Hawaii Revised Statutes) to serve as a nonrefundable low income tax credit that is not based on federal poverty guidelines;
(2) Changing the effective date to July 1, 2050, to facilitate further discussion on the measure; and
(3) Making technical nonsubstantive amendments for purposes of style and consistency.
As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 98, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 98, S.D. 1, and be placed on the calendar for Third Reading.
Respectfully submitted on behalf of the members of the Committee on Ways and Means,
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____________________________ DAVID Y. IGE, Chair |
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