The passage of HB 2177 is expected to significantly affect state tax laws by promoting digital transformation within the tax administration sector. By facilitating mandatory electronic filings for taxpayers exceeding certain thresholds, the bill aims to make tax compliance more efficient and less burdensome for both taxpayers and the state. This change is anticipated to improve overall tax collection and compliance rates while reducing the costs associated with paper processing. Additionally, the legislation introduces firmer penalties for late filings, potentially discouraging procrastination among taxpayers.
Summary
House Bill 2177 seeks to enhance the state tax administration framework in Hawaii by expanding the Department of Taxation's authority to mandate electronic filing of tax returns and related documents. It requires certain taxpayers, including high earners and specific business entities, to file electronically, thereby streamlining the tax filing process and reducing administrative burdens. The bill also outlines new penalties for noncompliance with electronic filing requirements and eliminates the previous authorization for the department to charge fees for certified copies of tax clearances.
Sentiment
The sentiment surrounding HB 2177 is mixed. Proponents, often within the business community and some government sectors, argue that electronic filing will enhance efficiency and improve compliance. They emphasize the benefits of modernizing tax processes in line with technological advancements. Conversely, some critics express concerns that the mandatory nature of electronic filings could pose challenges for certain taxpayers, particularly those who may lack access to necessary technology or the skills to navigate digital platforms effectively.
Contention
One notable point of contention during discussions of HB 2177 revolves around the potential for increased penalties associated with noncompliance. Opponents argue that the penalties could disproportionately affect lower-income taxpayers or small businesses that may struggle with the transition to electronic filing. Additionally, there are concerns regarding the accessibility of online tax filing resources and support for taxpayers who may be unfamiliar with the new requirements. The legislation's impact on liquor license applicants, who must now show compliance with state tax laws as a condition for licensing, also sparked debate among industry stakeholders.
Income tax; interest accrual and due dates of certain reports or returns; emergency declaration; modifying period of underpayment for corporations. Effective date. Emergency.
Eliminating school district property taxes; imposing county and school district taxes; establishing the School District Emergency Fund and the School District Property Tax Elimination Fund; consolidating Articles II and III of the Tax Reform Code of 1971; in preliminary provisions relating to sales and use tax, providing for definitions; in taxation generally relating to sales and use tax, providing for exclusions and for transfer to county sales and use tax accounts; in preliminary provisions relating to personal income tax, providing for definitions; and making repeals.