The Exorbitant Cost of Collecting Honolulu’s Rail Surcharge Tax

Act 247, SLH 2005, granted counties the authority to impose a county surcharge of no more than 0.5% on gross income that is subject to the State’s GET [General Excise Tax] at the rate of 4.0% to fund county public transportation systems…  The City and County of Honolulu was the only county to adopt the surcharge, which took effect on January 1, 2007. The State keeps 10.0% of the collections from the county surcharge as administrative costs, and Honolulu County receives the remaining 90.0% of the collections.

Hawaii’s State Government has unnecessarily profited from the Honolulu rail project. It is time for State lawmakers to rethink the 10% administrative fee. Right now, it is exorbitant. A more reasonable fee is between 0.5% and 1.0%.

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