The following letter was sent to Matson customers today:
In order to increase tax revenues during this period of fiscal crisis, the state of Hawaii has temporarily suspended many general excise tax exemptions. The suspended exemptions include certain transportation and maritime support services such as stevedoring. This means that the state will tax carriers for a portion of the cargo costs that had previously been exempted, and the cost to carriers serving the state will increase.
Effective July 10, 2011, Matson will implement a General Excise Tax Arbitrary to recover these extra costs. Because the calculation is complicated, Matson will implement a flat fee of $52 per container on all cargo moving to and from the state of Hawaii. This charge will appear as a separate line item on Matson’s Hawaii service bills. Our intent is to recover only the additional costs that result from the state’s action. Unless the legislature further extends the suspension, the exemptions would be reinstated in 2013 and Matson would remove the General Excise Tax Arbitrary charge at that time. We also will review the amount of this charge annually to ensure that it recovers only the additional tax costs we incur.
The new tax arbitrary will apply to cargo moving to, from and through Oahu. Cargo moving to and from the Neighbor Islands already is assessed a Neighbor Islands Excise Tax Arbitrary of $13 per container. This tax was assessed by the state in 2004 and has appeared on Matson’s freight bills since that time. Neighbor Island cargo will continue to show this tax arbitrary on Matson’s freight bills in addition to the new $52 General Excise Tax Arbitrary that becomes effective July 10. If you have any questions, please contact your account executive or our Customer Support Center. Thank you for shipping with Matson.
Abercrombie signs bill hiking GE Tax $400M
Gov. Neil Abercrombie on Tuesday signed a bill into law that temporarily suspends general excise tax exemptions on nearly two dozen business activities, the largest source of new revenue to help balance the state budget.
Lifting the tax exemptions on contractors, businesses that sublease, airlines and others could generate about $200 million a year. The law is scheduled to sunset in June 2013.
Abercrombie also signed a bill into law that repeals a state income tax deduction on higher-income taxpayers, limits itemized deductions for higher-income taxpayers, and delays an increase in the standard deduction and personal exemption.