HI SCR170

Direct the Director of Taxation to review Hawaii Revised Statutes section 237-25(c) to determine if there is a rational basis for its application compared to other sections of chapter 237.

Section 237-25(c) prohibits taxpayers from deducting tangible personal property costs in service businesses even when separately billed, while sections 237-14, 237-14.5, 237-18, 237-21, 237-23(a)(7), and 237-23(b)(3) allow segregation and allocation of gross proceeds to apply different tax rates.

If the Director of Taxation finds no rational basis for the disparity, urge the Director to administratively suspend application of section 237-25(c).

Require the Director of Taxation to report findings and recommendations to the Legislature no later than twenty days before the 2014 Regular Session convenes.