Budget & Taxes (Tax Incentives)

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)

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.

Makes broadcast and streaming platform productions and commercial advertisement productions with Internet-only distribution eligible to receive the Motion Picture, Digital Media, and Film Production Income Tax Credit. Repeals 1/1/2033. Effective 7/1/3000. (HD1)

Establishes a telework tax credit for small business employers who allow telework for at least 30% of their employees. Applies to taxable years beginning after 12/31/24.

Establishes a nonrefundable income tax credit to incentivize significant investment in agricultural production and support the expansion of agricultural crops that take longer to become productive. Applies to taxable years beginning after 12/31/2026. Sunsets 1/1/2031. Effective 7/1/3000. (HD1)

HB 462 adopts an Interstate Compact designed to phase out corporate welfare by creating a multi-state agreement among participating states. The bill directly affects businesses receiving state-level tax incentives, subsidies, or other financial benefits previously classified as "corporate welfare." Its key mechanism is establishing a coordinated framework where states collectively eliminate these subsidies through mutual agreement, rather than individual state action. This procedural bill does not create new state laws but enables states to work together to end such financial support for corporations.