BILLS THAT PASSED, OR FAILED, AT THE LEGISLATURE
Taxes

Advertiser Staff

Cigarette tax
(HB 2741 HD2 SD2 CD1)
Increases the cigarette tax from $1 per pack to $1.40 per pack in three increments to raise an extra $16 million a year for the state. Increases take effect in October, when the tax wgoes from $1 to $1.20; in July 2003, when it increases from $1.20 to $1.30; and in July 2004, when it increases to $1.40 per pack.

Ko Olina tax break
(SB 2907 SD2 HD2 CD1)
Provides for up to $75 million in tax credits for private developers who agree to invest in visitor attractions and educational facilities at the 642-acre Ko Olina Resort & Marina, including a proposed aquarium and marine science education center. Gov. Ben Cayetano has said he may veto the bill.

Home tax credit
(SB 2831 SD1 HD1 CD1)
Extends the state's offer of a 4 percent tax credit until July 1, 2003 to encourage home construction and remodeling. The current law offers the credit only until next June 30. The credit will cost the state an estimated $18 million in lost tax collection next year.

Business credit
(SB 2383 SD2 HD2 CD1)
Would provide a 4 percent tax credit for commercial construction and renovation projects from 2003 through 2006. A similar but larger credit was provided last year for hotel and resort construction. Gov. Ben Cayetano has said he may veto the measure.

Travel charge
(SB 2306 SD2 HD2 CD1)
Imposes a new passenger fee of up to $4.50 for each overseas or international traveler who uses a state airport, to help pay for airport operations and security. The fee will not apply to interisland travelers. The bill waives minimum rents for airport concessionaires such as Duty Free Shoppers indefinitely, until the concessionaires' business returns to pre-Sept. 11 levels. Lawmakers last year granted similar relief to concessionaires through April 30, and Gov. Ben Cayetano has indicated he may veto the new rent breaks for the concessionaires. The bill makes that difficult because the administration wants to impose the passenger fees.

Liquor tax
Would have increased liquor taxes by about 50 percent to raise an extra $20 million a year. The Cayetano administration proposed a doubling of the liquor tax, but both proposals failed.

Film tax credit
Would have provided a tax credit for companies that come to Hawai'i for television, movie or commercial production. The Cayetano administration estimated the credit would cost the state almost $1 million in lost tax collections.

Tax amnesty
Would have created a one-time tax amnesty period from July 1 to Feb. 28, 2003, allowing people who pay their back taxes to avoid interest, collection costs or penalties for late payment. As of Oct. 31 the state estimated it was owed $255 million in back taxes.

Tax cut
Would have reduced the state capital gains tax for the years 2002 to 2005.

Tax holiday
Would have established an excise tax holiday for purchases of less than $100 provided businesses pass the savings along to consumers.

Gas tax
Would have raised the gas tax for the Big Island to help pay for road maintenance and improvements there.

Untaxed music
Would have exempted local musicians from state income taxes on amounts earned from live performances.

Rental car surcharge
Would have authorized the counties to assess a surcharge of up to $5 per day on car rentals.

Car seat credit
Would have provided a $25 tax credit for family members who purchase a child booster seat, and would have required car seats or booster seats for all children under eight years old.