The Hawaii Senate has passed, in a 25-0 vote, legislation that would require a repeal provision to be included in any legislation that establishes a new tax expenditure, expands an existing tax expenditure, or extends the repeal date of an existing tax expenditure. Under the legislation, S.B. 2153, "tax expenditure" would be defined as a credit, deduction, exclusion, exemption, or any other tax benefit provided under state law.
The bill would also require legislation creating, expanding, or extending tax expenditures to include recapture provisions and measurable goals and objectives, as well as a requirement for an evaluation or study that could potentially create additional information reporting requirements for taxpayers that benefit from a tax expenditure.
Under S.B. 2153 as passed by the Senate, the Hawaii Department of Taxation would be required to submit a report on tax expenditures to the Legislature in odd-numbered years. The department's report would be required to include
* a detailed description of each tax expenditure;
* the statutory authority for each tax expenditure;
* the purpose and original intent of each tax expenditure;
* the actual or estimated revenue loss for each tax expenditure in the most recent fiscal year; and
* a determination of whether each tax expenditure has successfully achieved its intended purpose.
If enacted as passed by the Senate, the legislation would not take effect until July 1, 2017, to give the Department of Taxation time to begin capturing and analyzing data for purposes of the legislation.