MEDIA RELEASE

Urges Legislature to enact further reductions to save $400 million more

HONOLULU – Governor Linda Lingle today signed a new law that will lower unemployment insurance (UI) taxes paid by all employers. Act 2 (HB2169 HD2) will save businesses an estimated $77 million in unemployment insurance tax payments over the next four years.

“While this law helps businesses get some tax relief as they struggle to keep their doors open and retain their employees, it falls far short of what is needed to grow our economy,” Governor Lingle said. “I urge the Legislature to take up this matter next year and pass a bill similar to the one I proposed that would have saved employers $497 million and kept close to a half billion dollars in our local economy.”

Act 2 will reduce average unemployment insurance tax rates for FY 2010 to $630 from the original projection of $1,070. However, the rate jumps to an average of over $1,500 per employee by 2012. This measure sets the wage base for paying the taxes at 90 percent of the annual wage average, equal to $34,900.

By contrast, the Lingle-Aiona Administration proposal (HB2579/SB2732) would have kept the average insurance tax at $600, $690, $880, and $900 for the next four years and would have used a wage base of $27,200 for the first year.

Act 2 also adds $8 million to the tax burden of employers by keeping the average weekly unemployment benefit at a higher rate than current law.

“Despite these shortcomings in the measure, Governor Lingle signed the bill recognizing that some tax relief for employers is better than nothing,” Labor and Industrial Relations Director Darwin Ching said. “The Legislature has the opportunity and the obligation next year to grant further unemployment insurance tax relief since our economy will still be in a fragile recovery,” Ching added.

Act 2 takes effect immediately. The new unemployment insurance tax rates will be reflected in billings employers in the state will receive later this month.

MEDIA RELEASE

Do you need help with your income tax return? You may want to visit a volunteer site. Trained community volunteers can help you with some tax credits for which you may qualify. And, this help is absolutely free.

This program offers help with preparation of basic Federal and Hawaii State income tax returns for those who cannot prepare their own tax returns and have low-to-moderate income. Special services are also available for the Armed Forces, elderly, persons with a disability or limited English speaking.

The volunteer return preparation program is sponsored by AARP Tax-Aide, Internal Revenue Service (IRS), State of Hawaii Department of Taxation, Armed Forces, Community Organizations/Coalitions, Educational & Financial Institutions.

The AARP Tax-Aide designated sites give special attention to those who are age 60 and older. Check this site listing for the volunteer site nearest you or, for the latest updates, call AARP Tax-Aide at 1-888-227-7669; or Aloha United Way at 877-275-6569.

Free electronic filing (IRS e-file) of your Federal and Hawaii State income tax returns is available at most volunteer sites. It is a fast and accurate way to file and get your refund in half the time. Direct Deposit of your Federal refund is FREE and goes directly into your bank account in about 7 to 10 days.

New for 2009 tax returns, use part of your refund to buy US Savings bonds and start building your future. See Form 8888, Direct Deposit of Refund to More Than One Account. If you owe tax, you can e~file early and electronically designate payment for a later date in a single step. Both spouses must be present to sign the tax return if Married Filing Jointly.

A nine-digit site identification number at the bottom of your tax return will identify your return as one of thousands prepared by trained volunteers. It in no way affects the likelihood of an IRS examination (audit) of your return.

What to bring with you

* Photo identification.
* Social Security Card(s) for each person shown on the tax return.
* Birth date(s) for each person shown on the tax return.
* Copy of last year’s Federal & Hawaii State income tax returns.
* Form(s) W-2, Wage (Earnings) Statement(s); W-2G, Gambling Winnings.
* Form(s) 1099-G, Unemployment, State Refund; 1099-INT/DIV, Interest & Dividends; 1099-MISC, Miscellaneous Income; 1099-R, Distributions from Pensions, IRAs; SSA-1099, Social Security Benefits; & any other income.
* For credits/deductions-dependent care expenses including Care Providers: name, address & Tax ID number; real estate (property) taxes paid; Form(s) 1098-T or E, Tuition or Student Loan Interest statement(s), etc.
* Bank Routing Transit Number (RTN) & your Account Number. Must show a bank check or document for verification of savings or checking account number to elect Direct Deposit of your refund (or to elect electronic funds withdrawal of your balance due).
* Documents/Info for tax breaks as related to the American Recovery & Reinvestment Act of 2009 (ARRA) & more! Audios at www.irs.gov
* Amount of your Economic Recovery Payment received from SSA, Dept. of Veterans Affairs, and Railroad Retirement Board.

Most sites run through April 15; closed on state holidays. Subject to change without prior notification. AARP Tax-Aide = Special attention to age 60 & older; VITA = Volunteer Income Tax Assistance

* Captain Cook, Yano Hall — Wednesday, 9 AM – 12 Noon, Feb. 3 thru April 14 — AARP Tax-Aide. For Information, call 334-1212

* Hilo, CNHA — Feb. 4 thru April 17 — VITA. Appointment required, call Terri (800) 709-2642

* Hilo, Goodwill Industries — Wednesday, 4 PM – 7 PM, Feb. 3 thru April 7 — VITA. Appointment required, call (808) 756-0705

* Hilo, A & D Resource Center — Thursday, 8:30 AM – 12:30 PM; Feb. 4 thru April 15 — AARP Tax-Aide. Appointment required, call (808) 961-8777

* Hilo, St. Joseph Church — Tuesday, 8:30 AM – 12:30 PM; Feb. 2 thru April 13 — AARP Tax-Aide. Appointment required, call (808) 961-8777

* Kailua-Kona, AARP Info Center — Tuesday, 12 Noon – 6 PM; Feb. 2 thru April 13 — AARP Tax-Aide, Japanese & Tagalog spoken. Appointment required, call (808) 334-1212

* Kailua-Kona, Goodwill Industries — VITA. Appointment required,call Cassandra 808 315-1757

* Kailua-Kona, Hale Halewai Community Center — Thursday, 8 AM – 12 Noon; Feb. 4 thru April 15 — AARP Tax-Aide. For information, call (808) 334-1212

* Waimea, DLNR Hunter Education Bldg. — Monday & Thursday, 9 AM – 1 PM; Feb. 1 thru April 15 —AARP Tax-Aide. Appointment required, call Marge (808) 987-6340

* Waimea, Hawaii First Federal Credit Union — Feb.1 thru June 15 — VITA. Appointment required,call Mahealani (808) 885-6600

* Naalehu, Ka’u Federal Credit Union — Monday, Wednesday, Friday, Saturday 9 AM – 12 Noon; Tuesday and Thursday, 1 PM – 4 PM; Jan. 19 thru April 15 — VITA. Appointment required, call (808) 929-7334

MEDIA RELEASE

The County of Hawai‘i is changing the way it charges a fee for delinquent payment of the vehicle weight tax.

Effective August 1, 2009, any vehicle weight tax imposed by Hawaii County Code section 24-17 for any year and not paid when due, shall become delinquent and a penalty of $8.00 for vehicles taxed at the passenger car rate and $20 for vehicles taxed at the commercial rate shall be added to, and become part of the tax collected. This is the same for both the County and State Vehicle Weight Tax Penalty. A vehicle assessed at the Passenger rate will pay a County Penalty of $8 and State Penalty of $8 for a total of $16 for each year delinquent. A vehicle assessed at the Commercial rate will pay a County Penalty of $20 and a State Penalty of $20 for a total of $40 for each year delinquent.

Beginning August 1, the combined county and state fees for delinquent weight tax payments will be $16 for passenger vehicles and $40 for commercial vehicles.

This will replace the current policy which was to calculate a percentage of the taxes due and add them to the total amount due as the penalties for delinquent payment of taxes.

Previously the County and State charged 10 percent of the amount owed on delinquent payments. The new county fee is roughly the same as the percentage previously charged in most cases.

For information, call the Vehicle Registration and License Division, 961-8351.

MEDIA RELEASE

HONOLULU – Governor Linda Lingle vetoed HB 1405 today because this legislation has immediate and adverse consequences for residents and businesses of Hawai‘i. This legislation would place Hawai‘i companies at a competitive disadvantage. As a consequence of this bill, Hawai‘i businesses would no longer be able to receive commissions for advertisements on their website that link to numerous national and international firms that offer goods and services to Hawai‘i residents.

Already Amazon.com and Overstock.com have officially sent out notification that they are severing their “affiliate” relationships with Hawai‘i. Other well known internet-based firms, such as eBay are likely to do the same if prompt action is not taken. Hawai‘i residents can still order directly through these online retailers’ websites.

“I am vetoing this bill immediately to help ensure Hawai‘i is not economically hurt by legislation that was not well thought-out and would have negative consequences for non-profits such as the University of Hawai‘i bookstore, and businesses throughout our State,” Governor Lingle said. “I am hopeful by vetoing this bill that mainland-based companies will promptly restore their relationships with our State.”

The Attorney General found that HB 1405 HD2 SD2 CD1 may be legally defective in that it may violate Article III, Section 14 of the Hawai‘i State Constitution. This Article provides that each law shall embrace only one subject which shall be expressed in its title. The scope of HB 1405 may be broader than its title indicates and thus the legislation may not meet the constitutional test.

“We are hopeful the Legislature will recognize this legal flaw and not act to overturn my decision to veto this measure,” Governor Lingle added.

The Legislature can convene on July 15, 2009 to determine if they will sustain or override the Governor’s actions on any measures she vetoes between July 1, 2009 and July 15, 2009. On June 30, 2009 the Governor issued a list of 65 bills passed during the 2009 Legislative session that she is reviewing for potential veto action. This is one of those bills.

The Governor’s statement of objections regarding HB 1405 is attached and can also be found on the Governor’s website at: www.hawaii.gov/gov/initiatives/veto.

MEDIA RELEASE

SALT LAKE CITY, July 1 /PRNewswire-FirstCall/ — Overstock.com, Inc. (Nasdaq: OSTK) today sent notices to all of its affiliate advertisers in California, Hawaii, North Carolina and Rhode Island that it is dropping their services owing to eminent passage of laws requiring internet retailers to collect taxes if they have local affiliate advertisers.

In May 2008, Overstock.com ended its relationship with over 3,400 of its New York advertising affiliates and sued the state when New York enacted the first of these anti-internet advertising laws. The suit is still pending along with a sister suit brought by Amazon.com.

“It’s painful to have to terminate these relationships with affiliates, simply because they live in states where counterproductive (and likely unconstitutional) laws are being passed,” said Patrick Byrne, Chairman and Chief Executive Officer of Overstock.com. “However, politicians have to remember that a tax is a price that government charges for a service, and when they raise their prices, we’re going to buy less of their services.”

Overstock.com’s President, Jonathan Johnson, added: “Internet advertising is a tidy little business that can be done by just about anyone, anywhere on the globe. When states unwisely and unconstitutionally pass these laws, their local internet ad business will quickly go dark, and that business will simply migrate to states more friendly to internet commerce. In the end, the only thing to be accomplished by these laws will be to put more local citizens out of work–exactly the wrong choice in a down economy.”

Overstock.com’s action comes on the heels of Amazon’s recent termination of its own North Carolina, Rhode Island, and Hawaii internet ad affiliates.

A handful of other states have considered similar laws which attempt an end-run around U.S. Supreme Court decisions requiring that a company have “physical presence” in a state before it can enforce sales tax collection obligations. The laws in question seek to designate local, independent internet advertisers as constituting sufficient physical presence in a state to justify the imposition of collection obligations.

Byrne observed: “Outside of Utah, we don’t have the type of operations that storefront and other retailers have, and we don’t impose the same burdens on local state infrastructure that locally based business do; therefore, imposing similar tax collection obligations on us in those states is patently unfair. When you come to realize that there are 7,000 taxing districts in this country, you get a glimpse of how big the burden would be. We, of course, do collect taxes, but only in states where we have physical operations – as the Constitution requires.”

Overstock.com plans to sever its affiliate advertising relations in each state that appears to be close to passage of similar laws, and only reinstate these businesses in states were such laws are found unconstitutional, are vetoed or repealed. In addition to the states affected by today’s action, the Connecticut legislature has considered, but not acted on a bill, and similar initiatives were considered and rejected by the Maryland, Minnesota, and Tennessee legislatures when those bodies foresaw the negative economic consequences.

When asked what will happen if states continue to put pass these laws, Byrne replied, “Sadly, the business of internet advertising will be one more US-invented business that will migrate overseas.”

Baron Sekiya/Hawaii247.org

Internet retail giant Amazon.com closed the associate accounts of Hawaii residents as of Tuesday, June 30, in reaction to House Bill 1405, which would collect taxes on all sales to Hawaii-based customers should the associates program continue. House Bill 1405 takes effect Wednesday, July 1.

Amazon.com has urged associates affiliated with the company, or its sister site Endless.com, to voice opposition to the legislation with Gov. Linda Lingle who has until July 15 to veto the bill.

Typically, residents with Amazon associates accounts who used banner ads on their Web sites, e-mail notices or other means of directing sales traffic to Amazon.com or Endless.com earned up to 15 percent of the sale. Amazon.com used an associate’s account identification to mark the referrals to its site and to track sales.

Amazon.com terminated associates programs June 26 in North Carolina and June 29 in Rhode Island due to similar legislation. California also is considering instituting a similar tax on out-of-state businesses.

The legislation goes beyond Amazon.com as it covers any business in another state that has 20 or more affiliates in Hawaii or if the business generates more than $100,000 through any referrals from Hawaii residents or if a single resident generates at least $10,000 in sales during the calendar year.

Without House Bill 1405 any U.S. businesses outside Hawaii without a physical presence in the state did not have to pay the general excise tax on sales. Currently, Apple has retail stores in Hawaii and charges tax to Hawaii customers who purchase goods, music and software online.

Below is the e-mail sent to Amazon.com associates:

We are writing from the Amazon Associates Program to notify you that your Associates account has been closed as of June 30, 2009. This is a direct result of the unconstitutional tax collection scheme passed by the Hawaii State Legislature with an effective date of July 1. As a result, we will no longer pay any referral fees for customers referred to Amazon.com or Endless.com after June 30.We were forced to take this unfortunate action in anticipation of actual enactment because of the uncertainty and timing of a veto, and the possibility that a veto could be overridden. The governor has until July 15 to veto the bill but, as indicated, the bill has an effective date of July 1.

Please be assured that all qualifying referral fees earned prior to June 30, 2009 will be processed and paid in full in accordance with our regular referral fee schedule. Based on your account closure date of June 30, 2009, any final payments will be paid by September 1, 2009.

In the event that Hawaii’s governor vetoes this tax collection scheme, and that veto is not overridden, or in the event the law eventually is repealed, we would certainly be happy to re-open our Associates program to Hawaii residents.

The Hawaii General Assembly’s website is http://www.capitol.hawaii.gov/, the governor’s website is http://hawaii.gov/gov and additional information may be obtained from the Performance Marketing Alliance athttp://www.performancemarketingalliance.com/.

We have enjoyed working with you and other Hawaii-based participants in the Amazon Associates Program, and wish you all the best in your future.
Best Regards,

The Amazon Associates Team

Curbside Drop-Off Service for Last Minute Filers on O’ahu Discontinued This Year

Honolulu –The Department of Taxation is reminding Hawai’i taxpayers that the deadline
to file State individual income tax returns will be Monday, April 20, 2009.

Starting this year, the department will not offer curbside drop-off service after regular
business hours on that day, due to the significant decrease in the number of people
using the service in prior years.

The after-hours curbside drop-off has seen a steady downward trend in the number of
tax returns collected over the years due to the increase in taxpayers filing their tax
returns electronically. However, drop boxes will still be available in front of the tax office
building at 830 Punchbowl Street, near the entrance to the building, and also on the
adjacent Halekauwila Street for last-minute paper return filers. Tax returns will be
considered filed on time if they are placed in the drop boxes by midnight, April 20, 2009.

The department would like to thank their dedicated staff who volunteered their time over
the past 20 years to provide the curbside drop-off service, which addressed a specific
need prior to the electronic filing era.

The Department of Taxation also urge Hawaii taxpayers to file their tax returns
electronically for expedient processing of refunds and also to receive confirmation of
filing their tax returns.

Taxpayers who file the Form N-13, short form for residents, are urged to use the quick,
convenient, free “E-file” to file their 2008 tax returns which will also be due on April 20,
2009. Form N-13 (Resident Income Tax Return – Short Form) may be electronically
filed at no cost at: www.ehawaii.gov/efile/ to create an account – then file the N-13
online. Taxpayers may also file the Form N-11 (Hawai’i Resident Income Tax Return)
or Form N-15 (Hawai’i Part-Year Resident or Nonresident Tax Return) through the Joint
Federal/State E-filing (JELF) program. Check the Department of Taxation’s website for
a list of approved vendors who offer JELF at: www.state.hi.us/tax/b2_3software.htm.

For assistance on tax questions or filing your State tax return, call (808) 587-4242 or
toll-free at 1-800-222-3229.

For an extension to file individual income tax form: hawaii.gov/tax/2008/n101a_f.pdf