Speaker Calvin Say, Rep. Marcus Oshiro, Sen. Donna Mercado Kim and Sen. President Colleen Hanabusa at news conference on veto overrides.
Here are some facts on the bills that the legislature overrode on the last day of session:
HB 895 –Tax increase on tobacco products other than cigarettes:
*Expected to generate $3.2 million through FY10.
*Helps to deter people from using tobacco products (including smokeless tobacco, snuff, cigars, little cigars, and pipe tobacco) and raises much need revenue for our state.
*Taxing tobacco products other than cigarettes addresses the growing use of smokeless tobacco by Hawaii's youth.
HB 1741 – Conveyance tax increase:
* Raises conveyance tax for sales over $2 million and second or investment house purchases.
*Expected to generate $8 million through FY10 from conveyance tax increase on only the highest priced real estate.
*Breakdown per amount of real estate transaction:
o Between $2 million and $4 million, you will pay 20 cents more per $100 of value – at $2 million you will pay $4,000 more (1 fifth of 1% more)
o Between $4 million and $6 million, you will pay 40 cents more per $100 of value – at $4 million you will pay $16,000 more (2 fifths of 1% more)
o Between $6 million and $10 million, you will pay 60 cents more per $100 of value – at $6 million you will pay $36,000 more (3 fifths of 1% more)
o Greater than $10 million, you will pay 70 cents more per $100 of value – at $10 million you will pay $70,000 more (7 tenths of 1% more)
*Expected to generate $6 million through FY10 from redistribution of funds going to Rental House Trust Fund and the Natural Areas Trust Fund.
HB 1747 – Income tax increase:
*Expected to generate $48.3 million from an income tax increase on the highest 2% of earners in Hawaii.
*There will be no tax change for:
o Individuals with taxable income less than $150,000
o Head of households with taxable income less than $225,000
o Joint filers with taxable income less than $300,000
o No impact upon MOST tax Payers; only about 3 out of 100 tax payers.
*Based on Hawaii's 2006 income tax data:
o Total of 471,792 tax filers in 2006
o 11,472 tax filers earned more than $200,000
o Only 2.4% of resident tax filers earned more than $200,000 in 2006
*Less known about this bill – it will increase all standard deductions and the personal exemption by 10% in 2011:
o This will save lower income taxpayers about $11.0 million per year
o We would like to have provided this fiscal relief to the lower income tax filers earlier, but nothing prevents us from accelerating these provisions if things get better next year.
*This bill will generate about $48 million from the highest income taxpayers in the state.
SB 1111 – Transient Accommodations Tax (TAT) increase:
*This bill increases the transient accommodations tax by 1 percentage point (from 7.25 to 8.25%) beginning on July 1, 2009 and another percentage point (to 9.25%) beginning on July 1, 2010 and requires the additional revenues to be deposited into the general fund.
* We expect to generate about $28 million next year and $60 million in 2010 for the general fund.
*1% point increase on a $200/night room for five nights equals $10 - People will not be deterred from vacationing in Hawaii by a $10 increase.
*The increases in this bill are set to sunset in 2015.
*The TAT was also raised in 1987, 1994, and 1999.