Tom Yamachika: Some Revenue Bills Already On Gov鈥檚 Desk
It allows the Hawaii Legislature time to override potential vetoes.
奥别鈥檝别 previously warned that our Legislature has a dogged focus on new taxes.
鈥淎RF! Don鈥檛 make fun of me like that!鈥
That鈥檚 the sound of the Hawaii State Tax Watch Doggie, with a report on recent bills!
Q: What would you like to report?
A: Our Legislature is wasting no time pushing those revenue raisers! A couple of them cleared the legislative process already and were sent to the governor鈥檚 desk on March 20.
Q: What does that mean?
A: When a bill is sent to the governor during session, he needs to decide whether to sign or veto the bill within 10 days rather than the usual 45. So, bills could become law much earlier than June or July when most bills are approved.
Q: What else has gone up to the governor鈥檚 office already? I wrote about last week, which would try to force presidential candidates to post their tax returns, and I know that鈥檚 gone upstairs.
A: would raise estate taxes on Hawaii estates valued at over $10 million. It would apply a top tax rate of 20%. That would make us tied with Washington state as the highest state estate tax rate in the country.
Q: We want to be top dog that much?
A: (Face paw) I鈥檒l forget you said that. I guess they really want to soak the rich folks who die here. That鈥檚 dangerous. You need to remember that these folks easily can jump on a plane and be out of here. According to the Census Bureau we lost more than 10,000 people a year to the mainland for the last three years.
Q: Voting with their feet, I guess.
A: Then, there is , relating to marketplace facilitators.
Q: What鈥檚 that all about?
A: The state has tried really hard to go after online sellers like Amazon, Wayfair, and Overstock. Previously those sellers could offer products to Hawaii customers without paying Hawaii tax, and that gave them an advantage over local stores.
Last year, following a state-friendly U.S. Supreme Court ruling, our state adopted a law requiring many of those businesses to register and pay tax.
Q: So there was a problem with that?
A: The online sellers also set up 鈥渕arketplaces.鈥 Under that system they said they weren鈥檛 selling their own products, but were selling on behalf of other stores like Dan鈥檚 Dog Food in Plano, Texas.
So the marketplace said Dan鈥檚 Dog Food isn鈥檛 registered or paying tax in Hawaii, so the marketplace had no responsibility to collect or pay the general excise tax. Amazon, for example, was only paying tax on about half of its sales because the other half was marketplace sales.
Q: Why Dan鈥檚 Dog Food?
A: I鈥檓 hungry.
Q: So SB 396 will change this?
A: Yes. It says that if an online marketplace collects money on a sale to Hawaii, the marketplace needs to pay GET as the retailer. The business on whose behalf the marketplace is selling is treated as selling its goods to the marketplace.
Q: So the marketplace pays 4%, and Dan鈥檚 Dog Food would pay the half-percent wholesale rate GET.
A: Yes. I don鈥檛 know if Dan鈥檚 will actually pay, but that鈥檚 the theory. And the marketplace facilitators that don鈥檛 handle money will be required to report all of their Hawaii sales, with names and addresses of the buyers, to our tax office.
Q: Anything else on its way to the gov鈥檚 desk?
A: Not right now, but we鈥檒l keep you informed! Woof!
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