REQUESTING THE DEPARTMENT OF TAXATION TO CONDUCT A COMPREHENSIVE ANALYSIS OF CORPORATE INCOME REPORTING STRUCTURES, INCLUDING THE TREATMENT OF FOREIGN SUBSIDIARY INCOME, TO INFORM LONG-TERM FISCAL PLANNING.

This bill directs Hawaii's Department of Taxation to conduct a comprehensive study of how corporations report income, with a specific focus on the treatment of foreign subsidiary income. The analysis will examine different reporting methods, estimate revenue impacts from alternative structures, and compare Hawaii's approach with other states while considering administrative costs and data limitations. The Department must submit its findings to the Legislature by late 2026 to inform long-term fiscal planning without making immediate policy changes. This measure directly affects the state's tax department and provides a framework for future corporate tax policy discussions.