THE SENATE	S.B. NO.	646
THIRTY-FIRST LEGISLATURE, 2021		S.D. 2
STATE OF HAWAII

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  The legislature finds that traffic congestion is a serious problem that negatively affects the quality of life for residents and visitors in Hawaii.  Congestion on the State's roadways continues to increase, forcing people to spend more time sitting in vehicles and less time being productive at work or with families and friends.

     The legislature also finds that visitors make up a large proportion of public highway users and that counties have been impacted differently by the level of visitors.  For example, Maui county has the highest number of motor vehicle rentals on a per capita basis.  This places a greater strain on Maui roads and further increases roadway congestion.

     The legislature believes that it is prudent to target a specific group of highway users to raise revenue for necessary capital improvements to some of Hawaii's highways, which will relieve congestion and improve the quality of life for both residents and visitors.

     The purpose of this Act is to increase the rental motor vehicle surcharge tax in counties experiencing a high number of motor vehicle rentals and to use that revenue to fund projects in those counties to increase highway capacity and relieve traffic congestion.

     SECTION 2.  Section 251-2, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

     "(a)  There is levied and shall be assessed and collected each month a rental motor vehicle surcharge tax of $5 a day, or any portion of a day that a rental motor vehicle is rented or leased[.]; provided that, in any county having a resident population of more than 125,000, but less than 195,000, the rental motor vehicle surcharge tax shall be $8 a day, or any portion of a day that a rental motor vehicle is rented or leased.  The rental motor vehicle surcharge tax shall be levied upon the lessor; provided that the tax shall not be levied on the lessor if:

     (1)  The lessor is renting the vehicle to replace a vehicle of the lessee that is being repaired; and

     (2)  A record of the repair order for the vehicle is retained either by the lessor for two years for verification purposes or by a motor vehicle repair dealer for two years as provided in section 437B-16.

     In addition to the requirements imposed by section 251-4, a lessor shall disclose, to the department, the portion of the remittance attributed to the county in which the motor vehicle was operated under rental or lease."

     SECTION 3.  Section 251-5, Hawaii Revised Statutes, is amended to read as follows:

     "§251-5  Remittances.  (a)  All remittances of surcharge taxes imposed under this chapter shall be made by cash, bank draft, cashier's check, money order, or certificate of deposit to the office of the taxation district to which the return was transmitted.  [The] Except as provided in subsection (b), the department shall deposit the moneys into the state treasury to the credit of the state highway fund.

     (b)  For a county having a resident population of more than 125,000, but less than 195,000, $3 out of every $8 collected pursuant to section 251-2(a) for the use of any rental motor vehicle in that county shall be deposited into that county's subaccount within the state highway fund established pursuant to section 248-9(c)."

     SECTION 4.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect on January 1, 2050.

 

 

Report Title:

Rental Motor Vehicle Surcharge Tax; Increase

 

Description:

Increases the amount of the rental motor vehicle surcharge tax from $5 to $8 for any county with a resident population of more than 125,000, but less than 195,000.  Allocates the increase in surcharge tax revenues to the county's subaccount within the state highway fund.  Effective 1/1/2050.  (SD2)

 

 

 

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