Budget & Taxes (Tax Incentives)

SB 2597 creates an income tax credit for dairy farmers who convert their operations to hog farming. The credit covers costs for building or upgrading facilities like pens, waste systems, or feed storage during the conversion process. This directly affects dairy farmers seeking to switch livestock operations by reducing their state income tax burden for these specific infrastructure expenses. The policy provides a concrete tax benefit for eligible conversion costs without altering broader tax rates or policies.

Conforms county debt limit statements law to permit counties to exclude tax increment bonds from the debt limit of the counties if a constitutional amendment authorizing the use of tax increment bonds and excluding tax increment bonds from determinations of the counties' funded debt is ratified.

Restores the provision that makes references to the Internal Revenue Code's base-amount requirement inapplicable to the Research Activities Tax Credit, allowing all qualified research expenses to be claimed without regard to prior-year expenses. Increases the annual cap for the Research Activities Tax Credit.

Part I: Effective 1/1/2027, 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. Part II: Establishes within DOTAX a Corporate Tax Law Task Force to annually review the State's corporate tax laws and recommend updates to close tax loopholes.

Amends the amount of total income tax credits available. Increases the annual per production and aggregate caps. Provides the State with alternative marketing opportunities in lieu of a shared-card, end-title screen credit.

Establishes a general excise tax exemption for the gross proceeds or income from the manufacture, production, packaging, and sale of diapers. Establishes a surcharge on the general excise tax and use tax for the sale or use of luxury cars.

Requires the Department of Transportation to establish a Clean Transportation Alternatives Incentive Program that returns funds to eligible residents of the State who meet a certain income threshold or use a certain amount of gasoline as fuel for transportation.

Amends the definition of "eligible business activity" for the purposes of the Enterprise Zone Program to include certain retail sales of tangible personal property; processing of certain value-added agricultural products; research development, sale, or production of all types of medical products and medical and health care services; activities of the Hawaii Food and Product Innovation Network; the provision of certain professional services by health care professionals; aerospace research and development activities; and information technology design and production services. Authorizes the Department of Business, Economic Development, and Tourism to declare up to two census tracts on state land that contain an innovation enterprise to be designated as an enterprise zone, subject to the Governor's approval and notwithstanding certain conditions. Requires DBEDT to conduct a comprehensive review, in consultation with the Department of Taxation, of the State Enterprise Zones Program and to submit a report to the Legislature. For taxable years beginning after 12/31/2026, extends the eligibility period of the state business tax credit for qualified businesses within state enterprise zones. Beginning 1/1/2028, extends the eligibility period of the general excise tax exemption for qualified businesses within state enterprise zones. Applies to qualified businesses who join the Enterprise Zone Program on or after 7/1/2026. (CD1)

HB 1585 would exempt eligible grocery items from the General Excise Tax (a tax on business activity) for taxable years beginning after December 31, 2025. This change would directly affect grocery businesses selling qualifying food items, removing their obligation to pay this tax on those sales. The bill’s key mechanism is a permanent tax exemption for specific grocery purchases, not a temporary relief measure. It applies only to groceries meeting defined eligibility criteria, not all retail goods. The bill is currently in committee referral after its initial introduction.

Requires tax expenditure disclosure to, and evaluation by, the Department of Business, Economic Development, and Tourism for certain income tax credits and general excise and use tax exemptions. Requires the Department of Taxation to share certain information with DBEDT upon request. (SD1)