Bill Would Tighten Requirements for Cash TransactionsMarch 5, 2013, 3:19 PM HST (Updated March 5, 2013, 3:21 PM) · 0 Comments
Farmers market vendors beware: the state is looking to clamp down on unreported cash sales.
Senate Bill 1196 would require that anyone who conducts cash transactions would have to offer a receipt of the sale and maintain records of all such transactions.
Under current law, only those who conduct more than 10 business transactions in a day are supposed to provide a receipt and record the activity.
However, according to written testimony submitted by the state Department of Taxation, which requested the legislation, some cash-based businesses have apparently not been forthcoming about the number and extent of their activities.
“Taxpayers state that they have not done ten cash-based transactions and are not required to keep any record, regardless of the number of cash-based transactions in which they may have actually engaged,” the department’s director, Frederick Pablo, said.
And records submitted don’t always reflect the true amount of sales “due to lack of required record-keeping for the first ten cash-based transactions,” he said.
Exempt from both the current and proposed law are those involved in casual sales, such as people selling their car or those holding a garage sale.
The bill was approved Thursday by the Committee on Ways and Means which amended the date it would take effect from July 1 of this year to July 1, 2050, which is standard legislative procedure to allow for continued discussion on the matter.
That draft of the bill was approved by the full Senate today on a 23-2 vote, which means it will now move over to the House.
Voting against the bill were Puna Sen. Russell Ruderman and Sen. Sam Slom, whose district is in southeast Oahu.
Ruderman said he isn’t necessarily opposed to the concept in general, and recognizes that the state can always use additional revenues.
However, Ruderman said he is concerned about the impact the bill would have on constituents in his district which depend on cash transactions, particularly the farmers market vendors.
“I didn’t want any further burden on them,” he said.
Slom told Big Island Now he wasn’t comfortable with the bill’s presumption “that everyone is guilty.”
He said if the tax department thinks someone is evading taxes it should go after them.
Slom also believes the bill would discourage economic growth.