Lingle pushes
earlier tax payments
Gov. Linda Lingle's administration hopes to boost state coffers by $40 million to $60 million by changing when employers have to turn over taxes.
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State Legislature: Bills
& Hawaii Revised Statutes
The bill (House Bill 2511, Senate Bill 2986) would move up the dates employers have to remit employee withholding tax by more than a month.
"Shortening that time period is going to be a burden on small businesses," said Sen. Sam Slom (R, Diamond Head-Kalama Valley), Small Business Hawaii president and executive director.
Ron Heller, a tax attorney and chairman of the leadership council of the National Federation of Independent Business, said, "People are going to have to move a lot faster, make deposits more often. It's a significant issue for small businesses."
"I don't think that there's a lot of awareness. I just heard about it recently," Heller said.
When the House Finance Committee held a hearing on the bill last week, the only testimony came from the state Department of Taxation and the Tax Foundation of Hawaii. The Senate Ways and Means Committee was scheduled to hear the bill this morning.
Current law requires businesses with an annual employee withholding tax liability of more than $100,000 to pay the money to the state Department of Taxation on or before the 10th day of the month following the month for which the taxes were withheld.
For example, if a business withholds state income taxes from an employee's paycheck on March 1, the employer has until April 10 to pay it to the state.
Employers with annual withholding tax liability of $5,000 to $100,000 have until the 15th day. Businesses with annual withholding tax liability of less than $5,000 can pay quarterly.
