HI HCR119

Requests the Tax Review Commission to analyze whether the sublease deduction under Hawaii Revised Statutes section 237-16.5 can and should be applied to hotel operators in the same manner as other subleased real estate.

Addresses the Department of Taxation's position that the sublease deduction cannot mitigate pyramiding where hotel operators pay rent to landlords while guests pay room charges to operators, despite both representing charges for occupancy of the same real estate.

Cites prior Tax Review Commission studies (1989 and 1995) that identified excessive pyramiding issues in the general excise tax, and notes prior legislative efforts (Acts 70, 71, 198) to reduce pyramiding on service provisions.

Requires the Tax Review Commission to report its findings and recommendations to the Legislature no later than twenty days before the 2017 Regular Session convenes.

Directs certified copies be transmitted to the Tax Review Commission Chairperson, Governor, and Director of Taxation.