Hawaii-2013-HCR122-Introduced

WHEREAS, the State of Hawaii needs additional sources of revenue to fulfill its long-term obligations and many underfunded state programs; and

WHEREAS, the State of Hawaii, with its general excise tax and income tax, is ranked among the highest in the nation with regard to the rate of taxation on local businesses and residents; and

WHEREAS, in 2012 alone, nearly 8,000,000 visitors came to Hawaii and spent $14,300,000,000 in total; and

WHEREAS, in 2011, visitors to Hawaii spent $2,500,000,000 on food and beverages, accounting for 20.7 per cent of total visitor spending; and

WHEREAS, 8,000,000 annual visitors are an untapped source of revenue for the State of Hawaii; and

WHEREAS, the state general excise tax rate is low in comparison to sales tax rates that are imposed on retail sales in many other states; and

WHEREAS, the State of Hawaii is committed to protecting the welfare of its citizens, including supporting measures to discourage the consumption of products that result in adverse health consequences, such as diabetes; and

WHEREAS, imposing a tax on the sale of non-essential food, such as food that may be purchased from restaurants, snack shops, vending machines, and discretionary food products sold in grocery stores, could create an additional source of revenue for the State; and

WHEREAS, exempting essential food items, such as meat, dairy products, vegetables, and fruits, from the sales tax would ensure that residents of the State would be able to purchase the groceries that they need; and

WHEREAS, imposing a sales tax on discretionary food would encourage healthier eating habits for residents and visitors alike; and

WHEREAS, imposing a sales tax for the sale of non-essential food at a rate comparable to rates that exist in other states would not be viewed as unreasonable; now, therefore,

BE IT RESOLVED by the House of Representatives of the Twenty-seventh Legislature of the State of Hawaii, Regular Session of 2013, the Senate concurring, that the Department of Taxation is requested to convene a working group to evaluate the feasibility of imposing a sales tax on non-essential food items, in lieu of the state general excise tax; and

BE IT FURTHER RESOLVED that the Director of Taxation is requested to serve as the chairperson of the working group and to select, as members of the working group, representatives of the:

(1) Department of Health;

(2) State Tax Review Commission;

(3) Department of Human Nutrition, Food and Animal Sciences of the College of Tropical Agriculture and Human Resources of the University of Hawaii at Manoa;

(4) Council on Revenues; and

(5) Retail Merchants of Hawaii; and

BE IT FURTHER RESOLVED that, as part of its evaluation, the working group is requested to develop:

(1) A procedure for imposing a sales tax on non-essential food items;

(2) An appropriate sales tax rate; and

(3) Revenue projections for the sales tax; and

BE IT FURTHER RESOLVED that the working group is requested to submit a report of its findings and recommendations, including any proposed legislation, to the Legislature no later than twenty days prior to the convening of the Regular Session of 2014; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Director of Taxation, the Director of Health, the Chairperson of the State Tax Review Commission, the Dean of the College of Tropical Agriculture and Human Resources of the University of Hawaii at Manoa, the Chairperson of the Council on Revenues, and the Chairperson of the Executive Committee of the Retail Merchants of Hawaii.

	OFFERED BY:	_____________________________

Report Title:

Taxation; Sales Tax on Non-Essential Food Items

HOUSE OF REPRESENTATIVES	H.C.R. NO.	122
TWENTY-SEVENTH LEGISLATURE, 2013
STATE OF HAWAII