The HAWAI'I ASSOCIATION OF REALTORS® has been and will continue to be adamantly opposed to any increase in the General Excise Tax. Thus far, we have been successful; however, the legislature still has the power to increase the tax.

We will continue to oppose such increases, especially when individuals and businesses are already struggling to stay afloat and trying their best to provide for their families and employees.

We have also been successful in resisting the dramatic increase in the Conveyance Tax under S.B. 1277 from earlier in the Session. Such an increase would be a detriment to the real estate industry with a proposed maximum Conveyance Tax increase for non-owner occupant condos and single-family residences from 35 cents per $100 (0.35%) to $8 per $100 (8%), an increase of 2,285%. It also proposed to increase the maximum Conveyance Tax rate on the sale of all other real property from 30 cents per $100 (0.30%) to $4 per $100 (4%), an increase of 1,333%.

To illustrate this situation, the transfer of ownership of a $10,000,001 commercial property would have been subject to an $800,000 Conveyance Tax.

On Saturday, April 18, House and Senate conferees met to discuss and pass several tax measures. The primary reason to convene this early in the conference committee process was to allow enough time to override a possible veto by the Governor while the legislature is still in session.

If the bills passed by the conferees on April 18 are passed by the legislature by this coming Wednesday, the Governor will have ten days to veto the bills or they will become law; if vetoed the legislature will have time to override the vetoes before the Session ends. In order to override legislation vetoed by the Governor, both Houses must have a 2/3 voting majority to overrule the Governor.


Below is an outline of several tax measures that will be voted on in the Senate and House floors on Wednesday, April 22

H.B. 1741, Relating to Conveyance Tax; conveyance tax rate - Increases conveyance tax on non-owner occupant condos and single-family residences to $1.25 per $100 (1.25% versus 8% under S.B. 1277), an increase of 357% (versus 2,285% under S.B. 1277); and increases the maximum rate on other property to $1 per $100 (1 % versus 4% under S.B. 1277), an increase of 333% (versus 1,333% under S.B. 1277).

H.B. 1747, Relating to Taxation; income tax rate - State income taxes would be a maximum tax rate of 12% on individuals who earn $150,000 or more a year, heads of households who make $225,000 or more a year, and couples filing jointly who earn $300,000 or more a year. The increases would be effective until year 2015.

Such an increase would result in the highest marginal income tax rate in the nation. Hawaii's current tax is 8.25% on individuals who earn $48,000 or more.
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This Call-For-Action will be ON until Wednesday, April 22.