SB 721 Hawaii Senate · 2025 Regular Session

RELATING TO THE ESTATE TAX.

Summary

Amends the exclusion amount of Hawaii's estate tax. Repeals exemption for tax imposed on transfer of taxable estate located in Hawaii for nonresidents and nonresidents who are not citizens. Applicable to decedents dying or taxable transfers occurring after 12/31/2024. Effective 7/1/2050. (SD1)

Issues: ✓ Budget & Taxes

Bill status passed 3 of 5 stages cleared

Introduction

Jan 2025

Committee Review

Mar 2025

Senate Passage

Feb 2025

House Passage

Governor

Introduced Jan 17, 2025 Last action Mar 4, 2025

Maddy AI version diff · 1 comparison

What changed between versions

SB721 → SB721_SD1 · 4 edits

MODERATE

This bill removes exemptions from Hawaii's estate tax that currently allow nonresidents to avoid paying tax on property located in Hawaii if that property is exempt in their home state. It also updates the exclusion amount calculation to align with federal estate tax rules and clarifies the definition of property location (situs) for tax purposes. The changes aim to ensure fair taxation of wealth and prevent wealthy nonresidents from exploiting state law differences to avoid estate taxes on Hawaii property.

Scope change

The bill expands the estate tax's applicability to nonresidents whose property is exempt in their home state, whereas previously such property could be exempt from Hawaii estate tax.

ELIGIBILITY

Removes exemptions for nonresidents whose taxable estate is exempt under the laws of the state where they are domiciled, requiring them to pay Hawaii estate tax on Hawaii-situs property.

DEFINITION

Updates the definition of 'situs' to reference Internal Revenue Code section 2104 and substitute 'Hawaii' for 'the United States' to clarify how property location is determined for tax purposes.

FISCAL

Modifies the exclusion amount calculation to align with federal estate tax rules, including adjustments for taxable gifts and federal applicable exclusion amounts as of December 31, 2017.

TIMELINE

Sets the effective date for the new provisions to July 1, 2050, applying to decedents dying or taxable transfers occurring after December 31, 2024.

Floor votes

How they voted

This bill passed the Senate by voice vote (no roll call recorded).

Full legislative history

Actions timeline

Total actions

Key actions

Committee

Mar 4, 2025

Committee

Referred to FIN, referral sheet 18

lower

Feb 27, 2025

Introduced

Received from Senate (Sen. Com. No. 29) in amended form (SD 1).

lower

Feb 27, 2025

Upper · Passed

Passed Third Reading, as amended (SD 1). Ayes, 25; Aye(s) with reservations: none. Noes, 0 (none). Excused, 0 (none). Transmitted to House.

upper

Feb 12, 2025

Upper · Passed

The committee(s) on WAM recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in WAM were as follows: 13 Aye(s): Senator(s) Dela Cruz, Moriwaki, Aquino, DeCoite, Elefante, Hashimoto, Inouye, Kanuha, Kidani, Kim, Lee, C., Wakai, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none.

upper

Feb 7, 2025

Upper · Passed

The committee(s) on WAM has scheduled a public hearing on 02-12-25 10:00AM; Conference Room 211 & Videoconference.

upper

Jan 23, 2025

Committee

Referred to WAM.

upper

Jan 17, 2025

Introduced

Introduced.

upper

1 primary · 0 co-sponsors