THE SENATE HAS TAKEN A BILL MEANT TO REPEAL TAX EXEMPTIONS- HB2877. AND TURNED IT INTO A 1-PERCENTAGE POINT GENERAL EXCISE TAX INCREASE.
RELATED: Overtaxed Hawaii: Protest against GE Tax hike March 23
This will increase GE Taxes on Oahu from 4.5% to 5.5% – a 22% increase. On outer islands the bill will hike taxes from 4% to 5% -- a 25% increase.
Because the GE Tax is levied at full rate on wholesale fuels and utility bills (except for interisland airline fuels), the GE Tax multiplies throughout the economy. 5.5% tax on the fuel used to generate electricity, 5.5% on the electricity itself, 5.5% on the fuel used to transport products, and another 5.5% on the products as they are purchased by consumers is a key reason for Hawaii’s high cot of living.
The GE Tax is a primary reason for the weakness of Hawaii agriculture and manufacturing. It is a severe impediment to tourism, giving Hawaii a reputation as an expensive place to visit.
ADV: 1 percentage point increase in GET backed by Hawaii Senate committees
SB: State Senate panels pass increase in general excise tax (Hanabusa says she doubts Senate has the votes to overcome a veto from Lingle.)
HB2877 >>> Bill Status and text (note: testimony refers to previous version of bill, not to broad-based GE Tax hike passed by Senate committees)
TAX INCREASE ADVANCES IN STATE SENATE 3/15/2010.