State tax collection
dropped 2 percent
in October

By Russ Lynch
Star-Bulletin

Taxes collected for the state's general fund last month equaled $214.4 million, a drop of $4.5 million, or 2 percent, from $218.9 million in October 1998, the state Department of Taxation said today.

Tax Director Ray Kamikawa said part of the reason was lower personal income tax rates now in effect. General excise and use taxes, the biggest part of Hawaii's tax collection, brought in $103.2 million in October, down 7.4 percent from $111.4 million a year ago.

Kamikawa said it is too early to measure the exact tax contribution from spending in early October by the 30,000 who attended the American Dental Association Convention.

Because the end of the month, when businesses are supposed to report their revenues, came on a weekend, many reports may not have been filed until this month and the results won't show until December, he said.

Hotel room tax collections last month totaled $10 million, up 22 percent from $8.2 million a year earlier. Most of that increase, however, was due to the tax rate rising to 7.25 percent this year, from 6 percent last year.

Kamikawa cautioned against placing too much emphasis on month-to-month comparisons.

The first four months of the 1999-2000 fiscal year generated general excise and use taxes of $475.6 million, up 0.8 percent from $471.7 million in the year-earlier four months. "The gratifying thing is that the GE (general excise) tax is still positive," Kamikawa said. "It shows us that the retail sector is still active."

Total state tax collections for the four months were down 0.8 percent at $950.4 million, from $957.8 million in the year-earlier period. The Council on Revenues has predicted that the state's total tax take for the fiscal year ending June 30 will be down 1.1 percent from a year ago, largely because of the first phase of income tax rate reductions approved last year.