Bill Watch: Taxes and Fees
UPDATED 2/3/11 at 2:45 p.m. This story has been updated to reflect the current status of the bills.
The Hawaii Legislature is in full swing, and lawmakers have a host of financial bills to consider. We’ve highlighted measures that deal with the state’s finances and ultimately affect taxpayers.
Taxes and Fees
Alcohol and Soda Taxes
The Bill:
What it Does: Increases each of the six alcohol taxes by 50 percent. Implements a new “sugary beverage fee” of 10 cents for containers 12 ounces or less, and 25 cents for containers bigger than 12 ounces.
The Latest: Passed first reading and has been referred to the House Committees on Economic Revitalization and Business, Health, and Finance. No public hearings have been scheduled for the bill or it’s companion Senate Bill 1289.
Cigarette Tax
The Bill:
What it Does: Proposes increasing the cigarette tax by 5 cents to 21 cents “for each cigarette or little cigar sold, used, or possessed by a wholesaler or dealer on and after July 1, 2011.”
The Latest: Passed first reading and has been referred to the Senate Committees on Health, Education and Ways and Means. No public hearings have been scheduled.
Related Bills: and would expand the cigarette tax to include more tobacco products than just cigarettes and cigars.
Vehicle Registration Taxes
The Bill: and .
What it Does: Increases the vehicle weight tax, an annual tax that all Hawaii car owners pay, in some cases doubling the current rate.
The Latest: H.B. 1102 was passed by the House Committee on Transportation on Feb. 2. It has been referred to the House Finance Committee, but a hearing hasn’t been scheduled. S.B. 1329 was passed by the Senate Committee on Transportation and International Affairs on Jan. 31 and has been referred to Ways and Means.
Related Bills: seeks to hike the flat-rate vehicle registration fee from $25 to $45. This bill was passed by the House Transportation Committee on Feb. 2. A hearing before the Finance Committee hasn’t been scheduled.
Pension and Itemized Deductions
The Bill:
What it Does: Allows the state to tax retirement income at the state level. Repeals the deduction for state income taxes paid.
The Latest: Passed first reading and has been referred to the House Finance Committee. No hearing has been scheduled.
Tax Credits, Exemptions
G.E.T. Exemption for Food, Medical
The Bill:
What it Does: Provides G.E.T. exemption for food and medical services.
The Latest: Passed first reading, referred to Ways and Means Committee. No hearing has been scheduled.
Related Bills: proposes creating 4-percent G.E.T. credits for qualified food and medical services just for senior citizens age 65 and older. proposes a G.E.T. exemption for food.
Business Income Tax Exemption
The Bill:
What it Does: Exempts first $50,000 of taxable income received by a business that is either incorporated in Hawaii or functions as a pass-through entity that incurs a minimum percentage of operational expenses in the state during the tax year.
The Latest: Passed first reading, referred to the Ways and Means Committee. No hearing has been scheduled.
Hawaii Employees’ Retirement System Fund
What it Does: Places moratorium on enhancement of the Hawaii Employees’ Retirement System benefits until the system’s funded ratio is at least 80 percent.
The Latest: Passed first reading, referred to House Committees on Labor and Finance.
Related Bills: Companion .
What it Does: Raises level of contributions by the state and counties.
The Latest: Passed first reading, referred to House Committees on Labor and Finance.
Related Bills: Companion .
What is Does: Raises the contribution rate for employees who start with the state or counties after June 30, 2012.
The Latest: Passed first reading, referred to House Committees on Labor and Finance.
Related Bills: Companion .
What it Does: Changes definition of “compensation” for the purpose of calculating retirement benefits to exclude overtime, bonuses, lump sum salary supplements, allowances, or differentials.
The Latest: Passed first reading, referred to House Committees on Labor and Finance. No hearing has been scheduled.
Related Bills: Companion .
Hawaii Employer-Union Health Benefits Trust Fund
What it Does: Establishes bargaining unit health benefits trust funds. Requires public employers and unions to negotiate employers’ contributions. Amends the impasse procedures for certain bargaining units. Provides right to strike on the issue of a public employers’ contribution for health and other benefits.
The Latest: Passed the House Committee on Labor Jan. 28. Referred to Finance Committee.
What it Does: Establishes tiered system of employer contributions for the Medicare Part B premiums of new employees who first enter service after June 30, 2011, and subsequently retire.
The Latest: Passed first reading, referred to House Committees on Labor and Finance.
What it Does: Eliminates state-funded Medicare Part B reimbursements for retired employee-beneficiaries and the spouses of employee-beneficiaries who are retired employees.
The Latest: Passed first reading, referred to House Committees on Labor and Finance.
Related Bills: Companion .
State Bank
The Bill:
What it Does: Establishes the state bank of Hawaii for the purpose of promoting agriculture, education, community development, economic development, commerce, and industry within the State.
The Latest: Passed first reading, referred to Committees on Economic Development and Technology, Commerce and Consumer Protection, and Ways and Means.
Related Bills: .
