HI HR74

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 hotels and other transient accommodations operators.

Addresses the Department of Taxation's position that the sublease deduction cannot be applied to mitigate general excise tax pyramiding when hotel operators pay rent to landlords and guests pay room charges to operators for the same real estate occupancy.

Directs the Tax Review Commission to report its findings and recommendations to the Legislature no later than twenty days prior to the convening of the 2017 Regular Session.

Notes that previous Tax Review Commissions (1989 and 1995) recommended structural changes to the general excise tax due to excessive pyramiding, and that prior legislation (Acts 353, 70, 71, and 198) addressed pyramiding for service-related transactions.

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