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TAX MAN: There’s lots to digest in governor’s bill package

Governor Josh Green recently gave his State of the State address. His office and his agencies dropped a bill package into the legislative hopper. It really feels like we’re in the legislative session now.

Bills introduced as part of the governor’s package bear a symbol, like a license plate number. There are three letters identifying the agency primarily sponsoring the bill, such as TAX for the state Department of Taxation, or ATG for the Department of the Attorney General, and a two-digit number. An agency’s leading bill, such as TAX–01, typically has some measure of extra importance or significance, but that can vary with agencies and administrations.

This year, the Department of Taxation has only one of its own bills in the session, TAX-01 (Senate Bill 1398 / House Bill 1087), which, for several decades, was used for the bill that conforms Hawai‘i’s income tax law (and, in recent years, its estate tax law, also) to the federal Internal Revenue Code. The department has no other bills of its own this year, which is highly unusual. However, as we shall see, the department contributed significantly to several high-profile bills this session.

This year, the centerpiece of the governor’s legislative agenda is Senate Bill 1347 / House Bill 1049, designated GOV-01. It aims to give broad tax relief to pretty much everyone in Hawai‘i. It does this by juicing up several credits already on the books, giving a significant boost to the standard deduction, and doubling the personal exemption amount.

It’s a tax bill, obviously, and the Department of Taxation admits having a heavy hand in drafting it. But designating it as GOV-01 means that the governor’s office itself probably will be pushing the bill and offering testimony to help move it along. Some call it the “Green Affordability Plan”, or GAP for short.

GOV-02 (Senate Bill 1348 / House Bill 1050) is a bill that establishes a General Excise Tax exemption for such things as certain groceries, feminine hygiene products, incontinence products and over-the-counter drugs. There already is a GET exemption for prescription drugs and prosthetic devices, so this bill appears to continue down a previously started path toward exempting essentials from the GET.

GOV-03 (Senate Bill 1349 / House Bill 1051) is the bill containing the often-discussed Visitor Green Fee Program. The idea here would be to charge state visitors $50 for a one-year license to visit state-owned natural resources like parks and nature preserves. We’ve spoken on this kind of program before and cautioned that a program like this may need some tweaking to be allowable under the U.S. Constitution’s Privileges and Immunities Clause.

GOV-04 (Senate Bill 1350 / House Bill 1052) establishes a Climate Impact Special Fund, and among other things allocates 5 cents per barrel of imported fossil fuel products from the Barrel Tax to feed the fund. Those who have been following us in the foundation know that we aren’t big fans of the barrel tax, or of special funds. But of course we need to see what the rest of the world thinks about this.

And, rounding out the list of tax bills being sponsored by the governor’s office is GOV-06 (Senate Bill 1352 / House Bill 1054), which establishes a rental deposit loan program, to help folks get themselves into housing units, and enlarges the GET exemption for construction of more affordable housing units.

Any of the bills mentioned in this article can be followed at Bills can’t change their number once assigned, although legislators can sometimes take liberties by amending the content of the bills. If you have opinions on these or any other bills, now is a good time to let your legislator know.


Tom Yamachika is president of the Tax Foundation of Hawai‘i.
Source: The Garden Island

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