| 47 | | - | SECTION 1. The legislature finds that a professional or vocational license grants certain benefits and protections to a license holder. However, a professional or vocational license holder should not be entitled to these benefits and protections unless the license holder is complying with the laws of the State, including the payment of taxes. The legislature finds that requiring tax clearances for certain transactions is not new or unique. In Hawaii, a tax clearance is required for certain state contracts, including those over $25,000; for procuring a liquor license; and in certain other instances. Requiring a tax clearance to be submitted with the application for or renewal of a professional or vocational license ensures that the holder of a license granted by the State is in compliance with state tax laws. The legislature further finds that improvements resulting from the department of taxation's tax modernization program have automated the bulk of tax clearances issued by the department of taxation. Furthermore, the new state data portal can incorporate a tax clearance requirement for the renewal of professional and vocational licenses. The purpose of this Act is to improve tax compliance by requiring a tax clearance before a professional or vocational license may be issued or renewed. SECTION 2. Chapter 231, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§231- Tax clearance before issuance and renewal of professional and vocational licenses. (a) No professional or vocational license shall be issued or renewed by the department of commerce and consumer affairs unless the applicant or licensee presents to the licensing authority a certificate authenticated by the director of taxation, showing that the applicant or licensee: (1) Does not owe the State any delinquent taxes, penalties, or interest; (2) Has entered into and is complying with an installment plan agreement with the department of taxation for the payment of delinquent taxes in installments; or (3) Is in compliance with all applicable tax laws contained in title 14. (b) The department of taxation and department of commerce and consumer affairs shall jointly implement a procedure or system to efficiently process and issue clearance requests and responses. The procedure or system may include the performance of all tasks electronically and in bulk." SECTION 3. Chapter 463B, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows: "§436B- Tax clearance before issuance and renewal of professional and vocational licenses. No professional or vocational license shall be issued or renewed by the department unless the applicant or licensee presents to the licensing authority a certificate authenticated by the director of taxation, showing that the applicant or licensee: (1) Does not owe the State any delinquent taxes, penalties, or interest; (2) Has entered into and is complying with an installment plan agreement with the department of taxation for the payment of delinquent taxes in installments; or (3) Is in compliance with all applicable tax laws contained in title 14." SECTION 4. The department of taxation shall prepare any forms necessary for the tax clearance required pursuant to this Act. SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date. SECTION 6. New statutory material is underscored. SECTION 7. This Act shall take effect on January 1, 2050, and shall apply to taxable years beginning after December 31, 2022. |
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| 47 | + | SECTION 1. The legislature finds that a professional or vocational license grants certain benefits and protections to a license holder. However, a professional or vocational license holder should not be entitled to these benefits and protections unless the license holder is complying with the laws of the State, including the payment of taxes. The legislature finds that requiring tax clearances for certain transactions is not new or unique. In Hawaii, a tax clearance is required for certain state contracts, including those over $25,000; for procuring a liquor license; and in certain other instances. Requiring a tax clearance to be submitted with the application for or renewal of a professional or vocational license ensures that the holder of a license granted by the State is in compliance with state tax laws. The legislature further finds that improvements resulting from the department of taxation's tax modernization program have automated the bulk of tax clearances issued by the department of taxation. Furthermore, the new state data portal can incorporate a tax clearance requirement for the renewal of professional and vocational licenses. The purpose of this Act is to improve tax compliance by requiring a tax clearance before a professional or vocational license may be issued or renewed. SECTION 2. Chapter 231, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§231- Tax clearance before issuance and renewal of professional and vocational licenses. No professional or vocational license shall be issued or renewed by the department of commerce and consumer affairs unless the applicant presents to the issuing agency a certificate signed by the director of taxation, showing that the applicant: (1) Does not owe the State any delinquent taxes, penalties, or interest; (2) Has entered into and is complying with an installment plan agreement with the department of taxation for the payment of delinquent taxes in installments; or (3) Is not subject to income tax in Hawaii." SECTION 3. Chapter 463B, Hawaii Revised Statutes, is amended by adding a new section to part III to be appropriately designated and to read as follows: "§436B- Tax clearance before issuance and renewal of professional and vocational licenses. No professional or vocational license shall be issued or renewed by the department unless the applicant presents to the licensing authority a certificate signed by the director of taxation, showing that the applicant: (1) Does not owe the State any delinquent taxes, penalties, or interest; (2) Has entered into and is complying with an installment plan agreement with the department of taxation for the payment of delinquent taxes in installments; or (3) Is not subject to income tax in Hawaii." SECTION 4. The department of taxation shall prepare any forms necessary for the tax clearance required pursuant to this Act. SECTION 5. This Act does not affect rights and duties that matured, penalties that were incurred, and proceedings that were begun before its effective date. SECTION 6. New statutory material is underscored. SECTION 7. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2022. INTRODUCED BY: _____________________________ |
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