HRS § 248-2.6 - County surcharge on state tax; disposition of proceeds
AI-assisted research summary: County surcharge collections must be paid into the state treasury, partly retained for state costs, and the balance distributed back to the counties.
(a) If adopted by county ordinance, all county surcharges on state tax collected by the director of taxation shall be paid into the state treasury quarterly, within ten working days after collection, and shall be placed by the director of finance in special accounts. Out of the revenues generated by county surcharges on state tax paid into each respective state treasury special account, the director of finance shall deduct ten per cent of the gross proceeds of a respective county's surcharge on state tax to reimburse the State for the costs of assessment, collection, and disposition of the county surcharge on state tax incurred by the State. Amounts retained shall be general fund realizations of the State. (b) The amounts deducted for costs of assessment, collection, and disposition of county surcharges on state tax shall be withheld from payment to the counties by the State out of the county surcharges on state tax collected for the current calendar year. (c) For the purpose of this section, the costs of assessment, collection, and disposition of the county surcharges on state tax shall include any and all costs, direct or indirect, that are deemed necessary and proper to effectively administer this section and sections 237-8.6 and 238-2.6. (d) After the deduction and withholding of the costs under subsections (a) and (b), the director of finance shall pay the remaining balance on [a] quarterly basis to the director of finance of each county that has adopted a county surcharge on state tax under section 46-16.8. The quarterly payments shall be made after the county surcharges on state tax have been paid into the state treasury special accounts or after the disposition of any tax appeal, as the case may be. All county surcharges on state tax collected shall be distributed by the director of finance to the county in which the county surcharge on state tax is generated and shall be a general fund realization of the county, to be used for the purposes specified in section 46-16.8 by each of the counties. [L 2005, c 247, §§5, 9] Attorney General Opinions Because the legislature was within its authority to retain ten per cent of the county surcharge, even if the retained amount exceeds the actual costs of administering the surcharge, there is no conflict within Act 247, Session Laws of Hawaii 2005, and no requirement that the State retain less than the ten per cent specified in subsection (a). Att. Gen. Op. 15-1. The State's retention of any funds in excess of what is deemed necessary and proper to administer the surcharge does not violate either the equal protection clause or the due process clause of the United States Constitution or the Hawaii State Constitution. Att. Gen. Op. 15-1. The ten per cent deduction of the county surcharge for the costs of assessment, collection, and disposition of the county surcharge on state general excise tax into the state general fund is neither unconstitutional nor illegal. Att. Gen. Op. 15-1. The term "shall" in "[T]he director of finance shall deduct ten per cent of the gross proceeds" in subsection (a) is mandatory, not directory. Att. Gen. Op. 15-1.