Budget & Taxes (Tax Incentives)

Requires counties to waive permitting fees for certain film activity. Exempts entertainment payroll companies from the GET. Repeals an income tax exemption for persons engaged in the business of motion picture and television film production for taxable years beginning after 12/31/2023. Amends the Motion Picture, Digital Media, and Film Production Income Tax Credit by providing an additional credit to qualified productions with a workforce of at least eighty percent local hires; requiring productions to contact all local labor unions servicing Hawaii's film industry to qualify for the credit; requiring qualified production costs of a taxpayer that exceed $1,000,000 to be certified by a CPA, rather than via tax opinion; increasing the aggregate cap amount on credits allowed in any given year, ramped down by one-sixth over five years beginning on 1/1/2028; and including broadcast and streaming platform productions under the credit. Applies the GET rate for manufacturers to productions. Exempts from the GET amounts received by a motion picture project employer from a client equal to amounts that are disbursed by the motion picture project employer for employee wages, salaries, payroll taxes, insurance premiums, and employment benefits and payments to loan-out companies. Repeals certain tax exemptions and the Motion Picture, Digital Media, and Film Production Income Tax Credit on 1/1/2033. Appropriates funds. Effective 7/1/3000. (HD2)

Exempts food and groceries from the general excise tax. Expands the general excise tax exemption implemented in 2024 for certain medical and dental services to include all medical and dental services.

SB 2451 eliminates the home mortgage interest deduction for second homes under Hawaii's income tax law. This change directly affects Hawaii taxpayers who own second homes and currently claim this tax break on their mortgage interest. The bill removes this specific deduction from the state tax code, meaning owners of secondary properties will no longer receive a tax benefit for mortgage interest paid on those homes. It also requires the state to submit regular reports to the Legislature about the bill's implementation and effects.

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.

Provides a general excise tax exemption for the sale of material, parts, or tools used for aircraft service and maintenance or for the construction of an aircraft service and maintenance facility. Effective 1/1/2027. (CD1)

Expands exemptions from school impact fee requirement for certain housing developments. Clarifies procedures and timing for land dedication or fee‑in‑lieu agreements for new residential developments. Repeals the sunset and reporting requirements under Act 268, SLH 2025. Restructures certain school impact fee accounts. Preserves existing educational contribution agreements. (CD1)

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.