The state won't be able to delay future tax refunds quite as long as it did this year, under a bill signed into law on Wednesday.
The law tightens up the date by which refunds have to be in taxpayers' hands. meanwhile taxpayer advocates wonder why the holdup on remaining refunds this year with state coffers filling back up faster than expected.
Governor Linda Lingle signed house bill 1948 into law, calling it a reaffirmation of tax department policy to provide refunds to taxpayers within 90 days of the filing or its due date, whichever is later. But the law also closes a payment processing window that been allowed past that 90 day stretch.
"It saves about 60 days that they have had in the past to actually cut the checks and get them out," said Lowell Kalapa of Tax Foundation of Hawaii.
Any shortening of the timeline is welcome since the state delayed hundreds of millions of dollars in tax refunds this year to help the state balance its budget.
"Some people are very angry and some people say they understand the need for it but not too many of those," said Stan Shiraki with the Hawaii State Tax Department.
Nearly two hundred thousand taxpayers' refunds still won't be approved for release until late next week.
"I think we've processed about 125 million already of the delayed refunds.t here's about 175 million dollars left of the delayed refunds. we plan to start processing july 1st and in about 2 weeks it should be all processed out of our department, then it's just a matter of how fast it will get paid in terms of ACH or or checks," said Shiraki.
Taxpayer advocates say the wait didn't have to be this long, with the council on revenues signaling as early as march that tax collections were trending better than expected.
"Initially she was prudent, I think by the time we got down to march and the picture became much clearer that she should have started releasing it"," said Kalapa.
The administration disagrees
"I've talked to the director of finance who said still yet the financial plan is very tenuous so it's not a time to be alright let's go," said Shiraki.
The State Tax Department recently announced tax collections are nearly 2 percent above the same time last year -- a big change from the negative or flat projections previously forecast.
