Business/Taxes

Minimum wage
(SB 1144 SD2 HD2 CD1)
Would increase the state minimum wage from $5.25 an hour to $5.75 an hour next Jan. 1. Also would increase the minimum again to $6.25 an hour on Jan. 1, 2003. Increases the tip credit from 20 cents an hour to 25 cents an hour.

High tech tax breaks
(HB175 HD2 SD2 CD1)
Provides an income tax break for high tech companies that renovate commercial buildings. The tax credit will be equal to 4 percent of the cost of the renovations. The measure also dramatically increases an existing income tax credit for investors who invest in high technology enterprises in Hawai'i.

Business marketing
(HB200 HD1 SD1 CD1)
Allocates $400,000 to market Hawai'i as a business destination.

Closing loophole
Would impose the state's 7.25 percent hotel room tax on wholesale tour companies that sell hotel rooms as part of their packages. Depending on how the tax changes were structured, this bill would have allowed the state to collect an extra $30 million to $60 million a year.

Earned income tax credit
Would provide an unspecified state earned income tax credit to residents. The measure was intended to help low-income Hawai'i residents.

Food tax credit
Provides a tax credit of up to $70 per person to partially offset the impact of the state's 4 percent excise tax on food. Families with lower incomes would receive a larger credit, and those with higher incomes would receive smaller credits or no credit under the bill. This proposal was expected to cost the state about $20 million.

Standard deductions
Would increase the standard deductions that all taxpayers claim, which would reduce each person's state income tax liability. The Senate bill does not specify how much the standard deductions would be increased, but the House proposal is expected to cost the state $8 million to $12 million a year in lost tax collections.

Building renovations
Would create a tax credit to encourage revitalization of older commercial facilities, including retail, hotel, warehouse, and industrial facilities. The amount of the credit is left blank in the bill, meaning it is yet to be determined. To qualify for the credit, projects over $2,500,000 would have to pay prevailing union wages.

End tax cuts
Would halt the tax cuts approved by Gov. Ben Cayetano and the Legislature in 1998. Would eliminate the last two steps of the three-step tax cut, and would establish a new $25 per person tax credit to partially offset the effect of the state's 4 percent excise tax on food. The Senate approved the measure, but it is expected to fail in the House.

Excise cuts
Would eliminate the state's 4 percent excise tax on groceries, medical services and residential rent.

Income tax cuts
Would further reduce the top income tax rate by one percentage point over four years, and would make comparable adjustments in lower income tax brackets. Would cost the state about $145 million a year in lost tax collections.

Corporate tax cut
Would halve corporate income taxes as well as taxes on real estate investment trusts.

Luxury tax
Would impose a new luxury tax on purchases worth more than $20,000. For those purchases, an excise tax of 5 percent would be imposed. For all other purchases, the excise tax would remain at its current 4 percent.

Senior exemption
Would exempt senior citizens who are more than 65 years old from paying the 4 percent excise tax on groceries.

Renter's credit
Would increase the tax credit for low-income renters from $50 to $100.