Sign Up
SB 2738 Hawaii Senate · 2026 Regular Session

RELATING TO TAX HAVEN ABUSE.

Summary
Effective 1/1/2028, requires corporations to include in their income the income of all foreign subsidiaries to the State; applies the State's apportionment formula to determine the share of reported profits subject to the appropriate tax, which shall be deposited into the state general fund; and requires corporations to report all profits, losses, revenues, and inter-company transactions made and all taxes paid in other states. Establishes penalties for violations. Effective 7/1/2050. (SD1)
Issues: ✓ Budget & TaxesSupports Budget & TaxesBill closes tax loopholes by requiring corporations to report foreign subsidiary income and pay state taxes on it, increasing revenue for the general fund. This strengthens tax collection and fiscal management.95% confidence
Bill status passed 3 of 5 stages cleared
Introduction
Jan 2026
Committee Review
Feb 2026
Senate Passage
Feb 2026
House Passage
Governor
Introduced Jan 23, 2026 Last action Feb 20, 2026
Maddy AI version diff · 1 comparison

What changed between versions

SB2738 → SB2738_SD1 · 4 edits
MODERATE
This bill was renumbered from HB to SD1 and significantly altered its implementation timeline and enforcement. The most critical change is the effective date, which was delayed from January 1, 2027, to July 1, 2050, meaning the new reporting and tax rules will not apply for over two decades. Additionally, the bill added a new requirement for penalties for violations and removed the previously established Corporate Tax Law Task Force that was intended to review tax loopholes.
Scope change
The bill's scope regarding the Corporate Tax Law Task Force was removed entirely, while the scope of enforcement was expanded by adding a specific penalty clause for violations.
TIMELINE

The effective date for the bill's provisions was delayed from January 1, 2027, to July 1, 2050.

ENFORCEMENT

A new provision was added requiring penalties for any violations of the reporting requirements.

REQUIREMENT

The creation of a Corporate Tax Law Task Force to annually review tax laws and close loopholes was deleted.

TECHNICAL

The bill was reclassified from a House Bill (HB) to a Senate Bill (SD1) with updated metadata.

Floor votes

How they voted

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

Actions timeline

Total actions
9
Key actions
5
Committee
6
Feb 20, 2026
Upper · Passed
Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM.
upper
Feb 20, 2026
Committee
Reported from CPN/JDC (Stand. Com. Rep. No. 2611) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM.
upper
Feb 17, 2026
Upper · Passed
The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in CPN were as follows: 4 Aye(s): Senator(s) Keohokalole, Fukunaga, Awa; Aye(s) with reservations: Senator(s) Lamosao ; 0 No(es): none; and 1 Excused: Senator(s) McKelvey.
upper
Feb 17, 2026
Upper · Passed
The committee(s) on JDC recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in JDC were as follows: 4 Aye(s): Senator(s) Rhoads, Gabbard, San Buenaventura, Awa; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Chang.
upper
Feb 16, 2026
Upper · Passed
The committee(s) on CPN/JDC has rescheduled its public hearing to 02-17-26 9:30AM; CR 229 & Videoconference.
upper
Feb 13, 2026
Upper · Passed
The committee(s) on CPN/JDC has scheduled a public hearing on 02-17-26 9:45AM; Conference Room 229 & Videoconference.
upper
Jan 30, 2026
Committee
Referred to CPN/JDC, WAM.
upper
Jan 23, 2026
Introduced
Introduced.
upper
1 primary · 0 co-sponsors

Sponsors

Role
Legislator
Party
State
District
P
Photo of Karl Rhoads
Karl Rhoads
DDemocratic
HI
13