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Stealth Taxes in 2022 | Hawaii Reporter

Here on the Tax Foundation of Hawaii, we attempt to observe and report on payments proposing new taxes.  We strive like heck to select up any invoice that mentions taxes, or impacts the tax codes.  But that’s not sufficient.  Lawmakers will be very artful and suggest issues that don’t appear to be taxes, and so they typically idiot the Hawaii State Tax Watch Doggie’s nostril.  Here are some examples of latest stealth tax payments.

House Bill 2399, for instance, establishes an “Extended Producer Responsibility Program” that’s designed to slap a “fee” on anybody who imports or sells “fast-moving consumer goods,” which suggests something non-durable like meals or drink.  The payment within the present draft of the invoice is $150 for every metric ton of packaging materials positioned available in the market.  The Department of Health is tasked with administering this system.

As presently drafted, the payment might apply a number of occasions within the financial chain.  If Supplier A, for instance, sells paper plates to Plate Lunch Truck B who sells plate lunches on the plates, then each A and B can be accountable for the payment.

Worse, the invoice as drafted is designed to make the legislation laborious to seek out.  The invoice as drafted is a “temporary” measure designed to sundown on June 30, 2028, and as such the legislation, if handed, gained’t even be put within the Hawaii Revised Statutes.  Those who don’t already find out about this legislation can be unlikely to seek out it…till it’s too late.

Some of the commerce associations of affected producers testified that the Legislature established a Plastic Source Reduction Work Group in 2020, and that work group extensively debated the problems and concluded {that a} extra cautious research of producer accountability was wanted.  This invoice, nonetheless, mainly tells that group, “To heck with that study.  We are going to impose the tax now.”

This invoice continues to be alive and can be debated by a House-Senate convention committee.

Senate Bill 3040, sponsored by our Department of Accounting and General Services, offers with state procurement, particularly the place the State buys items and providers from different companies.  The invoice directs the state procurement administrator to obtain and administer automated procurement methods, after which accumulate a transaction payment from all distributors utilizing these methods. 

The invoice doesn’t inform us how a lot the payment goes to be.  Rather, it offers the State Procurement Office the authority to set the payment to cowl procurement automation system prices.  The Procurement Office in its testimony estimated that these prices can be $5 million to arrange the system and thereafter $500,000 to $1 million per 12 months in upkeep and licensing charges.

The invoice doesn’t make it necessary for any vendor to make use of the system – however we predict that’s the logical subsequent step.

This invoice can also be set to go to a House-Senate convention.

Last 12 months, the Department of Land and Natural Resources was pushing Senate Bill 1173, an “Ocean Stewardship User Fee,” which might have extracted an additional greenback from every passenger or buyer utilizing or driving on business vessels water craft, or water sports activities gear.  The moneys within the fund have been for use for marine useful resource conservation, marine useful resource influence mitigation measures, and changing mooring buoys and different infrastructure.  Oh, and 20% of it might go to the Office of Hawaiian Affairs as ceded land revenues.

Interestingly, the invoice additionally contained a provision saying that the payment wouldn’t rely as a gross receipt for business vessel operators who must pay the State a month-to-month payment based mostly on gross receipts.

That invoice was proposed in 2021 and carried over to the present legislative session.  However, that invoice by no means made it out of House Finance Committee.

Taxes are available many shapes and sizes.  Can you discover all of them?

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