SB 2741 Hawaii Senate · 2026 Regular Session

RELATING TO THE GENERAL EXCISE TAX.

SB 2741 would gradually remove the state's general excise tax from locally produced food items, such as farm-fresh produce and meals prepared by local restaurants. The bill phases in this tax exemption over time, starting with certain food categories and expanding to others in subsequent years. This change directly affects local food producers (like farms and small eateries) and consumers purchasing these items, reducing their tax burden. The bill is currently in early stages (introduced January 23, 2026) and has not yet been voted on by the legislature.

Issues: ✗ Budget & Taxes

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

SB2741 → SB2741_SD1 · 5 edits

MODERATE

The bill was fundamentally rewritten to shift its focus from exempting locally grown food to exempting agricultural inputs like seeds and fertilizer. This change alters the bill's purpose from helping farmers sell food tax-free to lowering the cost of production for all commercial agriculture. The effective date was also delayed from July 1, 2026, to July 1, 2050.

Scope change

The bill's scope changed from a consumer-facing exemption for specific types of locally grown food to a producer-facing exemption for all materials and costs used to grow food commercially.

SCOPE

The primary exemption was changed from 'locally produced food' to 'agricultural inputs' used in commercial production.

ELIGIBILITY

Specific exemptions for fresh produce, local proteins, and value-added foods were removed entirely.

DEFINITION

A new definition was added for 'agricultural inputs,' covering items like chemicals, feed, fertilizer, fuel, and equipment parts.

TIMELINE

The effective date was delayed from July 1, 2026, to July 1, 2050.

REQUIREMENT

Detailed rules regarding certification, labeling, and verification procedures for specific food products were removed.

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

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 AEN (Stand. Com. Rep. No. 2677) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM.

upper

Feb 18, 2026

Upper · Passed

The committee(s) on AEN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in AEN were as follows: 4 Aye(s): Senator(s) Gabbard, Richards, DeCoite, Rhoads; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Awa.

upper

Feb 10, 2026

Upper · Passed

The committee(s) on AEN has scheduled a public hearing on 02-13-26 3:10PM; CR 224 & Videoconference.

upper

Jan 30, 2026

Committee

Referred to AEN, WAM.

upper

Jan 23, 2026

Introduced

Introduced.

upper

2 primary · 1 co-sponsor