HONOLULU -- A bill introduced for the second consecutive year in
the State House here would exempt Hawaii travel agencies from
paying the state's 4% general excise tax on airline
A similar bill was introduced last year at the request of the
Hawaii ASTA chapter, but it died after the House Finance Committee
declined to vote on it.
The bill (H.B. 2009) would make travel agents the same under law
as insurance and real estate agents.
For these businesses, double taxation regarding outside
contractors was eliminated in the late 1970s.
Another bill being put forward this year (H.B. 2012) would
eliminate the double taxing of travel agents' revenues when
commissions are split with outside sales personnel.
Both agencies and their outside sales people now pay the 4%
general excise tax on all revenues.
This means, for example, if an agent gets a $50 commission and
gives $25 to an outside sales person, that $25 is taxed twice.
Under that bill, which is the first attempt by the ASTA chapter
to end the double tax, an agent would pay the tax only on the
commission kept, not on the amount given to the outside
According to Danny Casey, the chapter's legislative affairs
committee chairman, there is a precedent for eliminating such
The chapter is waiting for the House Finance Committee to set
hearing dates for both bills.
"We're in a wait-and-see mode," said Casey, who has chapter
members ready to testify.
Although Casey believes the chapter has a good case for H.B.
2009, he is not so optimistic for the airline commission bill (H.B.
Hawaii is the only state with a significant tax on airline
The chapter introduced the same bill last year to counteract in
a small way revenue losses resulting from commission caps.
It was the chapter's first move to get the airline commission
tax eliminated since 1988.
ASTA was successful in getting legislation passed that year,
only to see it vetoed by then Governor John Waihee.
Casey noted that legislators, like last year, face a state
However, he added, "There is a different attitude, a feeling at
the state Legislature of a need to free up business to create
Hawaii, with one of the poorest-performing state economies in
the U.S., has been losing jobs for some years, and the need for a
more pro-small-business climate was a major issue in last