Who will GET taxed or GET exempted during APEC?

I thought that it couldn’t get much worse: Hawaii is the only state with a general excise tax (GET) instead of a sales tax, meaning that we pay taxes on everything we buy – including food and medicine – from raw goods to wholesale to retail. This tax is not just on the cost of goods and services – no, it’s a tax on the total amount that businesses collect, including the tax!

It’s a neat trick for the state to collect more taxes than it should, pennies at a time so that we don’t feel the pinch.

But the Asia-Pacific Economic Cooperation (APEC) Conference in Honolulu, November 7-13, takes tax confusion to a whole new level. To add insult to the injury of the GET, there are four different tax-exempt cards that let people avoid paying the GET (general excise tax) and TAT (transient accommodations tax). Businesses must now scrutinize owls, buffalo, eagles, and deer to determine someone’s tax status.

While APEC is a great opportunity for Hawaii, I think that everyone should to have the pay the GET. We don’t exempt our own Congress members (or do we?), and the mantra today seems to be paying your “fair share.”

Here are four ways that Hawaii could make tax exemptions easier for businesses – and everyone.

1. Reduce the number of tax exemption cards to two, so that all purchases would be 100% tax-free. How about an octopus for official purchases and a snake for personal purchases?

2. Everyone would pay GET and TAT taxes, but tax-exempt individuals and organizations would get a tax rebate from the state. Of course, this shifts the burden to the state to send those rebate checks quickly.

3. Offer a tax credit to businesses (minimum $500 in exempt sales) to offset the costs of tax exemption card scrutiny and record-keeping (though I hate to propose even more paperwork).

4. Give everyone a GET and TAT tax-free holiday during the week of APEC. Or, better yet, give everyone a tax-free month in honor of APEC and economic development!

Are the tax exemption cards fair to businesses and to everyone else who has to pay the GET? Why does government make something pretty straight-forward, tax exemptions, so complicated? What do you think?

 

P.S. I think that my “confused monkey” is a free graphic, but if you think it’s not, please let me know!

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