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March 20, 2014

To: Senate Committee on Ways & Means

Sen. David Y. Ige, Chair

Sen. Michelle N. Kidani, Vice Chair

 

From: Grassroot Institute of Hawaii

President Keli’i Akina, Ph.D.

 

RE: HB 2135 — RELATING TO TAXATION

 

Dear Chair and Committee Members:

The Grassroot Institute of Hawaii would like to offer its comments on HB 2135 , which sets forth procedures and provisions under Hawaii tax laws to implement the Streamlined Sales and Use Tax Agreement.

Though the mechanism involved is complex, in simple terms, this bill is really about Internet taxation. As such, our interest in a competitive market that benefits the consumer (and taxpayer) leaves us extremely concerned about the intent and effect of this bill.

Internet sales taxes are extremely unpopular, and for good reason. The notion that they are necessary in order to “level the playing field” between local brick and mortar businesses and online companies fundamentally misreads the free market in general and the needs of Hawaii’s consumers in particular. Under the rubric of “simplifying” sales tax on the Internet, this scheme creates a multi-state tax cartel that will only end in empowering those politicians at the expense of the taxpayers. In the end, an Internet tax will result in higher taxes, hurting consumers and business owners while only the State profits.

Thank you for the opportunity to submit our testimony.

Sincerely,

Keli’i Akina, Ph.D.

President, Grassroot Institute of Hawaii

 

The Grassroot Institute also offered similar comments on a related bill, HB 2507 (Relating to Marketplace Fairness).