Hawaiʻi's Technology Community
Hawaii's Amazon Tax Bill - The Implications On Hawaii's Tech Industry
Aloha, currently Hawaii legislators are trying to pass an Internet tax law. Yes, Hawaii legislators think you should be paying even more taxes. Normally I am not a political person but after reading this bill I strongly believe this is bad for Hawaii.
The scary part is If you take a deeper look into this proposed bill you will see it has a dramatic negative affect on Hawaii's tech industry. This includes the entire online media (content sites, photographers, video, bloggers, social marketers) and even the software industry (Video games, Apple and Android apps). Please read my testimonial below on how this will affect our industry.
Take Action Today
1. Please contact your legislators today. View their emails and phone numbers here.http://www.capitol.hawaii.gov/session2011/members/senate/senatememb...
2. Public awareness helps. Go ahead and tweet and share this on Facebook or other social media outlets.
Here is my recent testimonial sent to the Hawaii State Senators.
Honorable Hawaii State Senators,
My name is Dean Takamine, I am the President of Synertech Media LLC a Internet Marketing company based in Honolulu, Hawaii. I have been in the Internet Marketing business for over 8 years. I am providing a testimonial to HB1183 also known as the "Amazon Tax Bill". In particular, I would like to clarify some common misconceptions about this bill and it's impact on Hawaii.
I would like to inform you on 3 very important issues about HB1183.
1. The consequences of HB1183.
2. How much tax revenue would HB1183 generate.
3. Who would benefit from this bill.
1. The consequences of HB1183.
HB1183 will hurt Hawaii's Online Media Industry as it will handicap them by limiting their revenue options. I also believe it will hurt our rapidly growing markets like social marketing, blogging, online videos (Youtube), photographers and even the software industry (Apple iPhone Apps generate revenue with advertising).
Competing mainland and international companies will have a competitive advantage in generating revenue. This will cause a "brain drain" as these companies will have no choice but to take their business to another state or internationally. Millions of dollars in advertising revenue would be lost, most of this revenue comes from out-of-state.
2. How much tax revenue would HB1183 generate.
This bill will not generate the income most people believe. This is because all of the large online retailers will just terminate their relationships with Hawaii advertising affiliates, thereby not needing to collect any taxes from Hawaii residents. What this means is we would not be able to collect even one penny from Amazon.com. I can't overstate this enough, we would not be able to collect one penny from every major online retailer that does not have a physical storefront in Hawaii (i.e. Amazon.com).
What we will end up doing is losing millions of dollars in affiliate advertising revenue (Virtually all this revenue comes from out-of-state). This bill will end up costing Hawaii more money than it generates. We will have to spend money to regulate this tax. On top of that, we will need even more money set aside for litigation.
3. Who would benefit from this Bill?
The real benefit of this bill is the Big Box Retailers like Best Buy, Walmart, etc. They are spending millions of dollars to lobby across the nation and to fool the public that they are "pro small business". They are making a case for a Internet tax help small businesses. Since when is Walmart pro small business? Will Hawaii fall for this trap?
The state of Illinois recently passed a similar bill and here are some recent quotes by the media.
"Wal-Mart welcomes Amazon and Overstock Illinois Affiliatesl"
"Sears Holdings Applauds"
"Walgreens Congratulates Illinois"
"Maybe Gov. Quinn of Illinois should have figured something was up when Walmart put their full support behind it."
Illinois effectively eliminated jobs and lost millions of dollars in state revenue. For what reason? They will not collect one penny from online retailers like Amazon.com.
Please connect the dots
Once you are able to see the true consequences of HB1183 you will realized just how damaging this bill is. HB1183 does nothing to generate revenues while killing off millions of dollars flowing into the State.
I would like to conclude, that we all agree that Hawaii needs to diversify it's economy. Hawaii's Online Media and Software Industry is a rapidly growing and clean industry. It is low impact and a vast majority of its revenues come from out-of-state. We should be promoting this industry not creating a bill like HB1183 and destroying it.
I urge you to "connect the dots" and vote for the people of Hawaii not the Big Box retailers. Please vote "No" on HB1183.
Mahalo for your precious time.
Aloha,
Dean Takamine
President, Synertech Media LLC
Views: 199
Comment
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Comment by Daniel Leuck on May 7, 2011 at 12:56am
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Well it looks like this bill didn't pass this year. It went into conference ant there was a stalemate between the Streamline Tax approach (Hawaii Senate Wants This) and the Nexus Tax Approach (Hawaii House Wants This). I went to the Capitol many times to talk to Representatives.
Excellent. Than you for your hard work raising awareness of this bill and its previous iterations.
Daniel you a right, Senator Carol Fukunaga is the one that shut down this bill. She understands the real impact of this type of Internet Taxation.
I am very happy to hear this for multiple reasons. I hope voters remember the actions of legislators on both sides of this bill.
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Comment by Dean Takamine on May 6, 2011 at 3:06pm
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Sorry I haven't updated this in a while.
Well it looks like this bill didn't pass this year. It went into conference ant there was a stalemate between the Streamline Tax approach (Hawaii Senate Wants This) and the Nexus Tax Approach (Hawaii House Wants This). I went to the Capitol many times to talk to Representatives. Daniel you a right, Senator Carol Fukunaga is the one that shut down this bill. She understands the real impact of this type of Internet Taxation.
Well, until next year,
Dean
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@Dean Senator Fukunaga is a smart woman. If you propose a strong case against this bill I'm confident she will support you. If there is anyway I can help just let me know.
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Daniel, I wish the general public new more about this bill. It is amazing to see right in front my face how little thought goes into passing these bills. If you were to ask all of the representatives that voted yes for this bill why they voted for this bill, you would not get one thoughtful answer.
I will be meeting and working with Senator Fukunaga to stop this bill in the Senate as it has passed the House.
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By the way, I was shocked to hear they are estimating that they will collect $35 million dollars from this Internet bill. Try doing the math and that number is laughable. Little do they know it will not even collect $1 million and end up costing the state much more in loss revenue, regulation costs and litigation.
@Dean You are spot on. The math is laughable. They will collect nothing. All the affiliate networks will drop us like a hot potato. All they are doing is stymieing web entrepreneurship. Representative Ward deserves an enormous amount of credit for being the sole voice opposing this ruinous bill. Its time for a house cleaning at the legislature. We've had enough of amateur night at the Apollo. Most of these legislators aren't on the level. We need better leadership.
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On Thursday night I went to the capitol to testify. Personally, it was very frustrating as the bill passed.
I tried so hard to explain the true implications of this bill, but it seems the Representatives were tuned out and didn't really care as they were caught up in thinking they would collect this windfall of tax money from Internet purchases.
By the way, I was shocked to hear they are estimating that they will collect $35 million dollars from this Internet bill. Try doing the math and that number is laughable. Little do they know it will not even collect $1 million and end up costing the state much more in loss revenue, regulation costs and litigation.
They will also require that the Internet retailers to send them private data of your online purchases. This is a huge privacy issues, not only does the state want your money but it want to know every single place you purchased a product online (porn sites anyone?). They will also require online retailers to send you an annual report of your total online purchases so you can pay any uncollected internet taxes when you file your income tax. As if you need anymore paper work in filing your taxes.
Here are the results of the voting, please contact your representatives to educate them about this bill.
Voted Yes:
Representative(s) M. Oshiro, M. Lee, Chong, Choy, Coffman, Cullen, Har, Hashem, Ichiyama, C. Lee, Tokioka, Yamashita, Marumoto;
Voted Yes with reservations: Representative(s) Jordan, Morikawa, Riviere;
Voted No:
Representative(s) Ward
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Tomorrow there is a public hearing for SB1355 at 5:00 PM. You may also submit written testimonial via email or go to the state capitol in person.
Read more here.
http://capitol.hawaii.gov/session2011/hearingnotices/HEARING_FIN_03...
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@Cameron It was introduced by Rep. Isaac Choy.
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Comment by Ryan on March 25, 2011 at 10:10pm
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Thanks (again), Dean, for the heads up. Blogged this:
http://www.hawaiiweblog.com/2011/03/25/hawaii-amazon-tax-back
I had to update it to reflect all the gutting and copying and pasting. I'll never understand these weird legislative shenanigans.
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I wonder if Representative McKelvey has thought about the fact that on his island, with even fewer employment options than Oahu, there are a fair number of people who eek out their living via their website.
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