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Sunday, April 17, 2011
How They Voted: House approves Pension Tax and GE Tax Hikes
By Andrew Walden @ 9:19 PM :: 5562 Views :: Taxes

by Andrew Walden

In the Hawaii State House, Tax Day was April 12.  On that day, legislators voted up several key tax increases approved earlier by the Senate and forwarded them to the House-Senate Conference Committees which will be meeting behind closed doors for the next two weeks. 

The Conference Committees will rewrite these proposals and then send them back to the full House and Senate for straight up or down votes. 

A Conference Committee could change the income cutoff of the Pension Tax SB570 down from $100,000 per year back to Abercrombie’s original $37,500 cut off or an intermediate figure. 

Another Conference Committee also could reinstate the 1% GE Tax hike proposal to SB754 or add more categories to which the GE Tax will now be applied.

The Conference Committees do not accept public testimony.  The bills they report back to the full House and Senate cannot be amended, only voted up or down.

But that doesn’t mean that Legislators cannot be influenced.  Be prepared for a two-week barrage of odd articles from the Star-Advertiser.  Much of their government-related coverage will consist of an effort to shape debate in the Conference Committee meetings.  For instance today’s Star-Advertiser included the following:

And no, that last article is not satire.  The Star-Advertiser is straight-facedly claiming that Hawaii government employees violate their union contracts and work late into the night without pay.  The ability to write such a thing without cracking up and rolling on the floor in fits of uncontrollable laughter is why editors and reporters at the Star-Advertiser make the Big Bucks. 

Meanwhile, voters should take note of which representatives voted to raise taxes.  Save this list for Election Day November 6, 2012:

  *   *   *   *   *

PENSION TAX SB570:

Report Title: Taxation; Pension; Deductions; Personal Exemption
Description: Provides for the taxation of certain pension incomes. Eliminates the deduction for state taxes paid for taxpayers with income above specified thresholds. Places temporary limitations on claims for itemized tax deductions. Delays the standard deduction and personal exemption increases approved under Act 60, SLH 2009, while also making those increases permanent. Effective July 1, 2011. (SB570 HD1)

Passed Third Reading In Senate 3-8-11, as amended (SD 2--without the pension tax language):

  • Ayes, 24; Aye(s) with reservations: none .
  • Noes, 1 (Senator(s) Slom).

Passed Third Reading in House 4-12-11 with the pension tax language inserted:

  • Ayes, 28; Representative(s) Har, Ichiyama, McKelvey voting aye with reservations;
  • Representative(s) Belatti, Brower, Carroll, Ching, Cullen, Fontaine, Hanohano, Hashem, Johanson, Keith-Agaran, C. Lee, Luke, Marumoto, Morikawa, Nakashima, Nishimoto, Pine, Riviere, Saiki, Takai, Thielen, Ward, Wooley voting no (23)

  *   *   *   *   *

GE Tax Hikes by removing Exemptions

Report Title: General Excise and Use Taxes; Temporary Suspension; Exemption for Certain Persons and Gross Amounts
Description: Suspends temporarily the exemptions for certain persons and certain amounts of gross income or proceeds from the general excise and use tax and requires the payment of both taxes at a four per cent rate. Effective July 1, 2011, and sunsets on June 30, 2013. (SB754 HD1)

Passed Third Reading in Senate 3-8-11, as amended (SD 1).

  • Ayes, 24; Aye(s) with reservations: none .
  • Noes, 0 (none).
  • Excused, 1 (Shimabukuro).

(Note: Sen Sam Slom opposes this measure, but by voting for it has won the right to serve on the Conference Committee which is responsible to hash out the differences between this bill and the House Bill.)

Passed Third Reading in House 4-12-11 with

  • Ayes, 44; Representative(s) Cullen, Hanohano, Marumoto, Morikawa, Riviere, Souki voting aye with reservations;
  • Representative(s) Brower, Ching, Fontaine, Johanson, Pine, Thielen, Ward voting no (7) and
  • none excused (0).

  *   *   *   *   *

Internet GE Tax

Report Title: GET; Out-of-State Business; In-State Business; Nexus Standard
Description: Creates a nexus standard for taxing out-of-state businesses on their business activities in Hawaii. Includes local affiliate agreements under the General Excise Tax (GET). Allows out-of-state and in-state businesses to file information regarding sales to residents of the State instead of collecting GET. Effective July 1, 2011. (SB1355 HD2)

Passed Third Reading in Senate 3-8-11 as amended (SD 1).

  • Ayes, 24; Aye(s) with reservations: none .
  • Noes, 1 (Senator(s) Slom).
  • Excused, 0 (none).

Passed Third Reading in House 4-12-11 as amended in HD 2 with

  • Ayes, 35; Representative(s) Hanohano, Jordan, C. Lee, Morikawa voting aye with reservations;
  • Representative(s) Belatti, Brower, Ching, Cullen, Fontaine, Johanson, Luke, Marumoto, Nishimoto, Pine, Riviere, Takai, Takumi, Thielen, Ward, Yamane voting no (16) and
  • none excused (0).

  *   *   *   *   *

AFFORDABLE HOUSING TO PAY CONVEYANCE TAX

RELATING TO CONVEYANCE TAX.
Report Title: Conveyance Tax Exemption; Low-income Housing Development
Description: Repeals conveyance tax exemption for low-income housing projects certified by the Hawaii Housing Finance and Development Corporation. Effective July 1, 2011. (SB1241 HD1)

Passed Third Reading in Senate 3-8-11, as amended (SD 1).

  • Ayes, 25; Aye(s) with reservations: none.
  • Noes, 0 (none).
  • Excused, 0 (none).

Passed Third Reading in House 4-12-11 as amended in HD 1 with

  • Ayes, 51; Representative(s) Fontaine, Johanson, Marumoto, Pine, Souki voting aye with reservations;
  • none voting no (0) and
  • none excused (0).

  *   *   *   *   *

MOTOR VEHICLE WEIGHT TAX INCREASE

Motor Vehicle; Weight Tax; State Highway Fund; Operations; Maintenance

Allows for increase in the State motor vehicle weight tax and deposits the money into the State Highway Fund (which the Legislature keeps raiding.) (SB1329 HD2)

Passed Third Reading in Senate 3-8-11 with 24 ayes,

  • Aye(s) with reservations: Senator(s) Dela Cruz, Espero, Kidani, Kim, Ryan, Wakai.
  • Noes, 1 (Senator(s) Slom).
  • Excused, 0 (none).

Passed Third Reading in House 4-12-11 with 39 ayes,

  • Representative(s) Cullen, Yamane voting aye with reservations;
  • Representative(s) Belatti, Fontaine, Johanson, C. Lee, Marumoto, Morikawa, Pine, Takai, Thielen, Ward, Wooley voting no (11) and
  • none excused (0).

  *   *   *   *   *

Marumoto: Pension Tax is a foot in the door towards taxing moderate, low income Pensioners

VIDEO: House GOP speaks up on Pension Tax, GE Tax, Internet Tax, Fees, and Special Funds

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