The Keiki Caucus, along with business and community leaders, yesterday gathered in support of SB 2405 and HB 2352, which would allow Hawaii to implement the streamlined sales and use tax agreement and collect taxes on out-of-state sales. Currently, Hawaii is unable to collect sales tax on out-of-state purchases, including those made through catalogs and over the Internet. The proposed measures would adopt amendments to Hawaii tax laws to implement the existing streamlined sales and use tax agreement.

The amount of sales and use tax revenues that have remained uncollected is significant. “Last year, the National Conference of State Legislatures calculated that $245.5 million was not collected by our state,” said Senator Suzanne Chun Oakland, chair of the Human Services Committee. “At the same time, hundreds of thousands of children and youth in Hawaii are being impacted by the cuts that have already been made in public education, child care, higher education, public health services, youth services and public assistance, to name a few.”

“Think about furlough Fridays,” suggested Representative John Mizuno. “If we had collected that $245 million, would this even be an issue?”

Mizuno also stressed that, “This is not a new tax. It is just uncollected tax.”

For the business community, there is also a concern that businesses selling via catalogs or over the Internet and do not collect the sales and use tax enjoy an unfair advantage. “For us, it’s all about competition,” said Dick Botti of the Hawaii Retail Association. “If somebody can order something from the mainland over the Internet and avoid the taxes, it creates an unfair playing field, and this helps level it. We need this type of legislation.”

According to Carol Pregill of the Retail Merchants of Hawaii, “The retail industry in Hawaii employs about twenty-three percent of our workforce. This bill would give us the opportunity, the latitude, the revenue, the break that we need that we can continue to employ our Hawaii people in our industry.”

Since 1969, Hawaii law has required that buyers pay a tax whenever they purchase something outside of Hawaii through a catalog, the Internet, or by other means. However, the means has not been available to collect those taxes.

“With technology, we now have a way to help our tax departments collect the taxes that are due, help level the playing field for our local businesses, and help preserve those programs that are at the core of government services,” said Senator Carol Fukunaga, chair of the Economic Development and Technology Committee.

In 2003, Hawaii became a participant in the national Streamlined Sales Tax Project by enacting the Hawaii Simplified Sales and Use Tax Administration Act (Act 173, Session Laws of Hawaii 2003). In 2009, the State Legislature passed streamlined sales and use tax legislation by wide margins (23-2 in the Senate, 42-7 in the House) but Governor Linda Lingle vetoed the measure. Twenty-three states representing over thirty percent of the nation’s population have already been certified as being in compliance with the Streamlined Sales and Use Tax Agreement: Arkansas, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Nebraska, Nevada, New Jersey, North Carolina, North Dakota, Ohio, Oklahoma, Rhode Island, South Dakota, Tennessee, Utah, Vermont, Washington, West Virginia and Wisconsin.

“The new social media is the perfect tool to “tweet” real-time updates during our hearings to keep the public informed,” said State Senator Jill Tokuda, chair of the Committee on Higher Education.

“There are times when members of the public want to be in two different hearings at the same time,” said Senator Rosalyn Baker, Chair of the Committee on Consumer Protection.  “Twitter will also help the public with long hearing agendas, so they can monitor the committee’s progress and return to the hearing when we are discussing the measure of interest.”

“The Twitter Pilot Project is part of our on-going efforts to use technology to improve public access to the legislative process,” said Senator David Ige, Majority Technology Leader.  “We have improvements in the Capitol website, with video archives of legislative proceedings, and bill tracking systems.”

To get real-time hearing updates join the following Senate Committees on Twitter at:

• Commerce and Consumer Protection (@HI_Senate_CPN)
• Higher Education (@HI_Senate_HRE)
• Health (@HI_Senate_HTH)

The purpose of the briefing is to investigate the causes of the power outage on December 26 that left the entire island of Oahu without power. The briefing will also focus on the reasons for the delay in restoring the power and possible solutions. In addition, the status of electrical systems on the neighbor islands will be explored.

Gabbard said, “I want to make it clear that this is not about pointing fingers and playing the blame game. The business community and residents deserve some answers. These outages do far more than simply leave our residents sitting at home in the dark. They have serious negative effects on businesses and our economy which is having a tough enough time as it is. I’ve been getting calls from small businesses that lost tens of thousands of dollars in damaged merchandise, in addition to lost business because they couldn’t stay open without electricity. We also need to find out what steps need to be taken to develop a more stable and reliable electrical grid.”

Baker said, “Reliable electric power is important for our residents and businesses. Through this briefing, we want to ascertain from a regulatory and policy perspective what needs to be put in place to ensure redundancy to improve current reliability as we move forward to new energy platforms.”

The briefing’s main presentation will be by officials of Hawaiian Electric Industries. Other briefings may be provided by the State Public Utilities Commission and the State Division of Consumer Advocacy. A question-and-answer period will follow the presentation. The public is welcome to ask questions pertaining to island-wide power outages and preparedness.

For more details on the informational briefing, please call Senator Gabbard’s office at 586-6830.

State Senator Rosalyn “Roz” Baker of Maui will receive the Mauka Makai Award for her significant contributions to the progress of cancer research, treatment, and education from the Cancer Research Center of Hawai‘i at the annual Mauka Makai…Voyage of Discovery gala on Friday, September 19, 6 pm. to 9:30 p.m. at the Waialae Country Club.

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