HI HB1265

Adopts amendments to Hawaii tax law to enable the State to participate in the national Streamlined Sales and Use Tax Agreement, which simplifies tax systems and allows voluntary collection by out-of-state retailers.

Creates three new tax chapters: Chapter A (tax on wholesalers, service businesses, and contractors at 0.5% rate), Chapter B (tax on imports of goods, services, and contracting for resale), and Chapter C (insurance producer tax at 0.15%).

Establishes destination-based sourcing rules for sales tax, telecommunications sourcing provisions, bad debt deductions, and direct mail sourcing exemptions for out-of-state distribution.

Implements amnesty for sellers registering under the streamlined agreement who were not previously licensed in Hawaii, with liability protection for three years of continued compliance.

Creates a legislative oversight committee to monitor the Department of Taxation's implementation of the streamlined sales and use tax agreement; takes effect upon Hawaii becoming a party to the agreement.