The former chair of the state’s Tax Review Commission says it’s unlikely this year’s group will be able to put together a report for lawmakers before the start of the next legislative session.

That means Hawaii will have to wait another year for the tax code to undergo a thorough review.

The commission, which meets every five years, last came together in 2005. It is responsible for analyzing the state’s tax structure and ensuring taxpayers pay their fair share. While the group’s reports aren’t binding, its findings are often used by lawmakers to adjust tax laws, craft increases and scrutinize exemptions. Technically, the group should have met last year.

“This commission is way late,” said state Rep. Isaac Choy, who chaired the 2005 Tax Review Commission. “They’ll have to figure out an extension to get a report completed. It’s impossible to get it done by January — if they want to do a good report.”

Gov. Neil Abercrombie has named five of the seven required members, according to spokeswoman Donalyn Dela Cruz. They are: Mitchell Imanaka, Randy Iwase, Michael McEnerney, Gregg Taketa and Darryl Nitta.

Dela Cruz said the five members are enough to make a quorum. But they have yet to schedule a first meeting.

Choy said the appointments were news to him.

The budget lawmakers approved in May includes $200,000 for the Tax Review Commission. The appropriation doesn’t specify what the money will be used for, but the budget worksheets show lawmakers are giving $50,000 less than the governor had requested.

Dela Cruz said Abercrombie hopes this year’s commission will help ensure everyone is paying their fair share of taxes.

“Gov. Abercrombie wants the tax code to be fairer, clearer, and adequate for the costs of government,” she said in an email to Civil Beat. “This means everyone paying their fair share and permanent fixes rather than temporary changes that cover short-term deficits, but don’t address long term problems, and adequate revenues that will cover the true costs of government so that the public’s expectations for services can be met.”

During the legislative session, lawmakers agreed on about $600 million in new tax revenue to help fund an $11 billion operating budget for the fiscal year that starts July 1.

The most recent report from the last Tax Review Commission, which was issued in December 2006, was cited by lawmakers, testifiers and state officials for tax-related bills during the session.

For example, the Department of Taxation used the old study when estimating revenue figures for eliminating General Excise Tax exemptions.

The chairman of the Senate Committee on Ways and Means referred to the commission when he rejected the governor’s proposal for a pension tax, saying it was a policy call and its full effects should be studied.

Within the 2007 report, the group put out sub-reports that included studies on everything from the GET to Act 221 credits. Some of the sub-report titles included:

  • A Study on the Question: Is Hawaii’s Tax Structure Adequate?
  • Hawaii’s General Excise Tax: Should the Base be Changed?
  • Measuring the Costs and Benefits of Hawaii’s Qualified High Technology Business Investment Tax Credit
  • Study on the Progressive Nature of Hawaii’s Taxes
  • Revenue Costs for Selected General Excise Tax and Use Tax Exemptions and Deductions

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