[INSIDE HAWAII INC.]
Honolulu tax attorney Ron Heller was recently named Southwest regional "Small Business Champion" by the National Federation of Independent Business.
Heller champions
small businessesWhat pro-business initiatives have you supported?
Ron Heller
>> Honors: Named Southwest regional "Small Business Champion" by the National Federation of Independent Business. He was honored at an awards ceremony June 16 in Washington, D.C. He has served as chairman and vice chairman of NFIB/Hawaii's Leadership Council. He also is NFIB/Hawaii's first Small Business Champion.
>> Day job: Heller is a director in the law firm Torkildson Katz Fonseca Moore & Hetherington, where he specializes in tax law
>> Age: 47
Actually we had one that just came to fruition. The Legislature this year passed a bill that allows a taxpayer to fight a state tax assessment in court without having to pay it first. Up until now, you had to pay first. That's something we've been working on for eight to 10 years, and finally the governor just signed it. In years past, I think the state Taxation Department opposed it. That finally changed with the Lingle administration. Previously, they were afraid it would hurt state tax collections, which I didn't think made sense because the federal government doesn't do that. In a tax case, it really is the opposite of a criminal case. In a tax case, if the state assesses more taxes against you, the presumption is the state is correct. And that's still true. Over the years we've worked on a lot of different issues. Workers compensation reform has been a continuing theme, controlling the cost of workers comp, getting some rationality to the requirements as to who has to have coverage. Owner employees are an example. If you are a business owner, do you have to get coverage on yourself? It's not totally clear cut, but it probably depends on the kind of entity you are. If you are a limited liability company, you probably do have to. Fixing that was part of governor's recent legislative package, but for a variety of reasons, it didn't fly.
What are the major problems with the state tax law?
In tax law we've been fighting a permanent battle to oppose any tax increases, to seek decreases. Every year there's always some proposal to increase money for some reason. Whatever the perceived need is, there's always someone saying we need to increase taxes for it. It's an objective fact that Hawaii is one of the highest taxed states, no matter how you slice the figures.
Can the Lingle administration change that?
I think at least they have an attitude of being opposed to tax increases. The last thing we want to do is make it higher.
What other tax problems are there in Hawaii?
One of the big things has been the federal change to allow faster depreciation of new business assets. They increased the amounts that you could expense immediately and the state did not follow those changes. Revenue is always the issue when you're talking about state taxes. Up at the Capitol, everyone says "that's nice in principal but what's the revenue impact?"
Have you been involved in the controversial Act 221 tax credits?
I was more involved when the act was written and passed in the first place. I think NFIB testified on tax credits. It was more sort of general support on reducing taxes.
Are you in favor of the credits?
Yes, but not so much of the wording. Personally, this is just my viewpoint, I don't know why it was a such a huge surprise to the Legislature that people did what it encouraged them to do. In retrospect I think they should have said "maybe we should have drawn this more narrow." I'd rather they'd reduced tax rates in general. I think that anything that reduces the overall level of taxation is a step in the right direction.
In a year and a half, how well has the Lingle administration fared in improving tax policies?
Pretty good on the whole. Part of the problem that state Tax Director Kurt Kawafuchi has is that people in the department have been there a long time. You can't just take that attitude and switch it on and off. In a sense, it's not their job to reduce taxes. It's their job to collect taxes.
Does that need to shift?
I think that's happening, but it's happening at a slow rate. Changing the culture is something that can't happen overnight. I think it should change to more of a level-fair viewpoint as opposed to "let's collect the maximum amount." And I think they are moving more in the direction of seeing the taxpayers' viewpoint.
I would encourage small business people to be involved in the political process, to pay attention to what's going on at the Legislature because it does affect their business. It's too easy to say "I'm too busy to testify." It's essential that people do that or the business viewpoint won't be heard.
Inside Hawaii Inc. is a conversation with a member of the Hawaii business community who has changed jobs, been elected to a board or been recognized for accomplishments. Send questions and comments to business@starbulletin.com.
