2018 Hawaii Legislative Watch: Taxes

Opening Day for the Hawaii State Legislature was on January 17 – the same day, 125 years ago, that the Kingdom of Hawaii was overthrown.

Slightly less outrageous is the sheer number of bills that are active in the 2018 Hawaii Legislature, which seems to multiply over the years. There are 4,948 current 2017 and 2018 Bills (2,621 House and 2,327 Senate). There are just 60 legislative days to effectively read, discuss, re-write, absorb testimony, and vote on these bills.

For the past few years, I’ve read through the bill summaries to find out about the bills being proposed that affect our money, education, and rights. I rely on these summaries to accurately reflect the legislators’ intentions. This year, instead of compiling an overview, I decided to narrow it down to the bills that I think need the most consideration and debate.

 Here are three significant tax bills to watch in the 2018 Legislative Session. If I’ve missed any tax bills that you think we need to keep our eyes on, please let me know!

1. Would you pay higher taxes for public education? There are a number of tax proposals that want to raise money for public education by adding a surcharge on residential investment properties and visitor accommodations (HB180 HD2, HB182 HD2) or by increasing the general excise tax (GET) by 0.5% (SB1132). As a public good, everyone pays for public education through state income taxes and the GET. Even with strong, fundraising parent-teacher groups, the schools are always in need of more money. Is it fair to require homeowners, including non-residents, to pay higher taxes for a service that is unrelated to their home or property? Is it effective to create a dedicated funding source that has little oversight by Hawaii legislators and taxpayers?

2. Tax over-reach on out-of-state businesses. In an effort to raise more tax revenue, the Legislature is looking to tax retailers or vendors that are not Hawaii businesses – but who may have customers in Hawaii. I think this is a blatant tax overreach. Some bills would require retailers or vendors to submit an annual report to Hawaii (HB398 HD2) or even collect GET (HB345, HB2417, SB161, SB620 SD2 HD2), or create a “marketplace provider” designation for businesses with sales over $100,000 from Hawaii residents (SB2871, SB2890). I think that these bills are a tax over-reach because they tax interstate commerce and attempt to impose taxes on businesses without representation in Hawaii. It places an unfair burden on businesses to be in compliance with Hawaii tax laws.

I hope that if other states attempt to tax Hawaii businesses that do business in their state, but do not have a business presence, our Hawaii legislators will protect us from their tax over-reach.

3. General excise tax (GET) vs. sales tax debate: Some people support the GET, because it has a wide tax base and spreads the burden of taxes to everyone. For just this reason, I think that the GET is unfair – it taxes every level of production, from wholesale to retail, and forces businesses to pay taxes on the taxes it collects! Instead, I support a reasonable sales tax, one that only taxes goods and services sold to the end-user, and affects taxpayers according to how much they consume. So I hope that HB2615, which would require the Tax Review Commission to conduct a feasibility study on whether the general excise and use tax laws should be replaced with a sales tax, gets some support from the Legislature this year.

The 2018 Hawaii Legislature adjourns on May 3. Please think about these issues and how they may affect you, everyone around you, and future generations. Whether you have concerns or feel strongly about an issue, speak up, talk about it, and be part of the discussion!

Explore posts in the same categories: Government, Taxes

Tags: 2018 Hawaii Legislative Session, Hawaii Legislative Watch, Hawaii Legislature 2018, Taxes

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