Bill Text: HI SB1107 | 2012 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Related Entity; GET Exemption

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Engrossed - Dead) 2012-04-13 - (H) Received notice of all Senate conferees being discharged (Sen. Com. No. 747). [SB1107 Detail]

Download: Hawaii-2012-SB1107-Amended.html

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STAND. COM. REP. NO. 570

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1107

       S.D. 1

 

 

 

Honorable Shan S. Tsutsui

President of the Senate

Twenty-Sixth State Legislature

Regular Session of 2011

State of Hawaii

 

Sir:

 

     Your Committee on Ways and Means, to which was referred S.B. No. 1107 entitled:

 

"A BILL FOR AN ACT RELATING TO THE GENERAL EXCISE TAX,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to exempt from general excise tax amounts received by a common paymaster to pay the remuneration for related persons to the common paymaster.

 

     Your Committee received testimony in support of this measure from Joseph P. Nicolai, President, JN Group, Inc; Dick Isoo Oshima, CPA, Oshima Company CPA; Arvid Tadao Youngquist, Chair and Editor, The Mestizo Association; and twenty-four concerned individuals.  Your Committee received comments on this measure from the Tax Foundation of Hawaii.

 

     Your Committee finds that, due to the high cost of doing business in the State, including the high cost of insurance and the cost of administering and handling payroll, it is not uncommon for companies with multiple related entities to process all employees under one common paymaster.

 

     Your Committee has amended this measure by:

 

     (1)  Exempting from general excise tax amounts received by a related or indirectly related management entity, including salaries, wages and taxes, sick and vacation pay, and pensions and insurance for employees of the related management company;

 

     (2)  Adding language to preserve this exemption from repeal when section 237-24.7, HRS, is reenacted on December 31, 2014;

 

     (3)  Changing the effective date to July 1, 2050, to facilitate further discussion on the issue; and

 

     (4)  Making technical, nonsubstantive amendments for the purposes of clarity, consistency, and style.

 

     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. 1107, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1107, 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,

 

		____________________________ DAVID Y. IGE, Chair