STAND. COM. REP. NO. 465

 

Honolulu, Hawaii

                  

 

RE:    S.B. No. 1185

       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. 1185 entitled:

 

"A BILL FOR AN ACT RELATING TO DENIAL OF GENERAL EXCISE TAX BENEFITS,"

 

begs leave to report as follows:

 

     The purpose and intent of this measure is to recast the definition of nonprofit organization to reflect the inapplicability of certain provisions of the general excise tax law, rather than basing the qualification of the organization on provisions of the federal income tax law.

 

     The Department of Taxation submitted testimony in support of this measure.  Tax Foundation of Hawaii submitted comments on this measure.

 

     Your Committee finds that sections 237-9.3 and 237-41.5, Hawaii Revised Statutes, currently define "nonprofit organization" by making specific reference to sections of the Internal Revenue Code.  However, these references are not consistent with section 237-23, Hawaii Revised Statutes, which sets forth the entities that are exempt from general excise tax.  Your Committee finds that amending the definition of nonprofit organization for consistency with section 237-23, Hawaii Revised Statues, will provide necessary clarity in application of general excise tax exemptions.

 

     Your Committee has amended this measure by 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. 1185, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1185, 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