RELATING TO TAXATION.

Taxes

Active

The official status still shows this bill as active or still awaiting another formal step.

Sponsor: NAKAMURA (Introduced by request of another party)
Last action: 2025-12-08
Official status: Carried over to 2026 Regular Session.
Effective date: Not listed

Plain English Breakdown

The bill summary does not provide specific details on how the tax revenue will be distributed after January 1, 2026.

Increasing Taxes on Cigarettes and Little Cigars

This bill increases the tax rates for cigarettes and little cigars starting January 1, 2026, and changes how these taxes are used.

What This Bill Does

Increases the cigarette and little cigar tax rate to 21 cents each starting January 1, 2026.

Who It Names or Affects

People who buy or sell cigarettes and little cigars in Hawaii.

Terms To Know

Excise Tax: A tax on specific goods, like tobacco products, to raise money for the government.
Non-General Funds: Special funds set aside by the government for specific purposes, such as health research or community services.

Limits and Unknowns

The bill does not specify how much of the tax will go to each special fund after January 1, 2026.
It is unclear if this bill will pass and become law in its current form.

Amendments

These notes stay tied to the official amendment files and metadata from the legislature.

HD1

Hawaii published version HD1

Plain English: The amendment increases the excise tax on cigarettes and little cigars sold by wholesalers or dealers in Hawaii starting January 1, 2026.

Increases the excise tax rate for each cigarette or little cigar from 15.00 cents to 21.00 cents after January 1, 2026.

The amendment text is incomplete and does not provide details about changes beyond January 1, 2026, so the full impact of future tax rates is unclear.

HD2

Hawaii published version HD2

Plain English: The amendment increases the excise tax on cigarettes and little cigars sold by wholesalers or dealers in Hawaii starting January 1, 2026.

Increases the excise tax to 17 cents per cigarette or little cigar sold after January 1, 2026.

The exact distribution of these funds is not specified in the provided amendment text and may require additional information from other sections of the bill.

Bill History

2025-12-08 D
Carried over to 2026 Regular Session.
2025-02-12 H
Report adopted; referred to the committee(s) on FIN as amended in HD 2 with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Sayama, Ward excused (3).
2025-02-12 H
Reported from HED (Stand. Com. Rep. No. 471) as amended in HD 2, recommending referral to FIN.
2025-02-07 H
The committee on HED recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 9 Ayes: Representative(s) Garrett, Amato, Kapela, Kila, La Chica, Olds, Sayama, Woodson, Souza; Ayes with reservations: none; Noes: none; and 2 Excused: Representative(s) Evslin, Muraoka.
2025-02-04 H
Bill scheduled to be heard by HED on Friday, 02-07-25 2:00PM in University of Hawaii at Manoa, Bachman Hall, Board of Regents Conference Room 106, 2444 Dole Street VIA VIDEOCONFERENCE.
2025-02-04 H
Passed Second Reading as amended in HD 1 and referred to the committee(s) on HED with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Kong, Ward excused (3).
2025-02-04 H
Reported from HLT (Stand. Com. Rep. No. 67) as amended in HD 1, recommending passage on Second Reading and referral to HED.
2025-01-31 H
The committee on HLT recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 9 Ayes: Representative(s) Takayama, Keohokapu-Lee Loy, Amato, Chun, Marten, Olds, Takenouchi, Alcos, Garcia; Ayes with reservations: none; Noes: none; and Excused: none.
2025-01-29 H
Bill scheduled to be heard by HLT on Friday, 01-31-25 9:15AM in House conference room 329 VIA VIDEOCONFERENCE.
2025-01-28 H
Re-referred to HLT, HED, FIN, referral sheet 7
2025-01-23 H
Referred to HLT, FIN, referral sheet 3
2025-01-23 H
Introduced and Pass First Reading.
2025-01-21 H
Pending introduction.

Official Summary Text

RELATING TO TAXATION.
Cigarette Tax; Tobacco Tax; Disposition of Revenues
Increases the tax rates for cigarettes and little cigars beginning 1/1/2026, amends the disposition of tax revenues to certain non-general funds starting from fiscal year 2026-2027, with the excess carrying over to the general fund, and expands the disposition of tax revenues to the non-general funds to include all tobacco product taxes. Repeals obsolete historical tax rates. Effective 7/1/3000. (HD2)

Current Bill Text

Read the full stored bill text

HB1085

HOUSE OF REPRESENTATIVES

H.B. NO.

1085

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO TAXATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

����
SECTION 1.
�
Section 245-3,
Hawaii Revised Statutes, is amended by amending subsection (a) to read as
follows:

����
"(a)
�

Every wholesaler or dealer, in addition to any other taxes provided by
law, shall pay, for the privilege of conducting business and other activities
in the State, an excise tax equal to:

���
[
(1)
�
5.00
cents for each cigarette sold, used, or possessed by a wholesaler or dealer
after June 30, 1998, whether or not sold at wholesale, or if not sold, then at
the same rate upon the use by the wholesaler or dealer;

����
(2)
�
6.00
cents for each cigarette sold, used, or possessed by a wholesaler or dealer
after September 30, 2002, whether or not sold at wholesale, or if not sold,
then at the same rate upon the use by the wholesaler or dealer;

����
(3)
�
6.50
cents for each cigarette sold, used, or possessed by a wholesaler or dealer
after June 30, 2003, whether or not sold at wholesale, or if not sold, then at
the same rate upon the use by the wholesaler or dealer;

����
(4)
�
7.00
cents for each cigarette sold, used, or possessed by a wholesaler or dealer
after June 30, 2004, whether or not sold at wholesale, or if not sold, then at
the same rate upon the use by the wholesaler or dealer;

����
(5)
�
8.00
cents for each cigarette sold, used, or possessed by a wholesaler or dealer on
and after September 30, 2006, whether or not sold at wholesale, or if not sold,
then at the same rate upon the use by the wholesaler or dealer;

����
(6)
�
9.00
cents for each cigarette sold, used, or possessed by a wholesaler or dealer on
and after September 30, 2007, whether or not sold at wholesale, or if not sold,
then at the same rate upon the use by the wholesaler or dealer;

����
(7)
�
10.00
cents for each cigarette sold, used, or possessed by a wholesaler or dealer on
and after September 30, 2008, whether or not sold at wholesale, or if not sold,
then at the same rate upon the use by the wholesaler or dealer;

����
(8)
�
13.00
cents for each cigarette sold, used, or possessed by a wholesaler or dealer on
and after July 1, 2009, whether or not sold at wholesale, or if not sold, then
at the same rate upon the use by the wholesaler or dealer;

����
(9)
�
11.00
cents for each little cigar sold, used, or possessed by a wholesaler or dealer
on and after October 1, 2009, whether or not sold at wholesale, or if not sold,
then at the same rate upon the use by the wholesaler or dealer;

���
(10)
�
15.00
cents for each cigarette or little cigar sold, used, or possessed by a
wholesaler or dealer on and after July 1, 2010, whether or not sold at
wholesale, or if not sold, then at the same rate upon the use by the wholesaler
or dealer;

���
(11)
]

(1)
�
16.00 cents for each cigarette or little
cigar sold, used, or possessed by a wholesaler or dealer on and after July 1,
2011, whether or not sold at wholesale, or if not sold, then at the same rate
upon the use by the wholesaler or dealer;

����
(2)
�
21.00
cents for each cigarette or little cigar sold, used, or possessed by a
wholesaler or dealer on and after January 1, 2026, whether or not sold at
wholesale, or if not sold, then at the same rate upon the use by the wholesaler
or dealer;

��
[
(12)
]

(3)

�
Seventy per cent of the wholesale price
of each article or item of tobacco products, other than large cigars,
electronic smoking devices, and e-liquids, sold by the wholesaler or dealer on
and after September 30, 2009, whether or not sold at wholesale, or if not sold,
then at the same rate upon the use by the wholesaler or dealer;

��
[
(13)
]

(4)

�
Fifty per cent of the wholesale price of
each large cigar of any length sold, used, or possessed by a wholesaler or
dealer on and after September 30, 2009, whether or not sold at wholesale, or if
not sold, then at the same rate upon the use by the wholesaler or dealer; and

��
[
(14)
]

(5)

�
Seventy per cent of the wholesale price
of each electronic smoking device or e-liquid sold, used, or possessed by a
wholesaler or dealer on and after January 1, 2024, whether or not sold at
wholesale, or if not sold, then at the same rate upon the use by the wholesaler
or dealer.

Where the
tax imposed has been paid on cigarettes, little cigars, or tobacco products
that thereafter become the subject of a casualty loss deduction allowable under
chapter 235, the tax paid shall be refunded or credited to the account of the
wholesaler or dealer.
�
The tax shall be
applied to cigarettes through the use of stamps.
"

����
SECTION 2.
�

Section 245-15, Hawaii Revised Statutes, is amended to read as follows:

����
"
�245-15
�
Disposition of revenues.
�
All moneys collected pursuant to this chapter
shall be paid into the state treasury as state realizations to be kept and
accounted for as provided by law; provided that, of the moneys collected [
under
the tax imposed pursuant to:
]
each fiscal year:

���
[
(1)
�
Section
245-3(a)(5), after September 30, 2006, and prior to October 1, 2007, 1.0 cent
per cigarette shall be deposited to the credit of the Hawaii cancer research
special fund, established pursuant to section 304A-2168, for research and
operating expenses and for capital expenditures;

����
(2)
�
Section
245-3(a)(6), after September 30, 2007, and prior to October 1, 2008:

���������
(A)
�
1.5 cents per cigarette shall be deposited to the credit of the
Hawaii cancer research special fund, established pursuant to section 304A-2168,
for research and operating expenses and for capital expenditures;

���������
(B)
�
0.25 cents per cigarette shall be deposited to the credit of the
trauma system special fund established pursuant to section 321-22.5; and

���������
(C)
�
0.25 cents per cigarette shall be deposited to the credit of the
emergency medical services special fund established pursuant to section
321-234;

����
(3)
�
Section
245-3(a)(7), after September 30, 2008, and prior to July 1, 2009:

���������
(A)
�
2.0 cents per cigarette shall be deposited to the credit of the
Hawaii cancer research special fund, established pursuant to section 304A-2168,
for research and operating expenses and for capital expenditures;

���������
(B)
�
0.5 cents per cigarette shall be deposited to the credit of the
trauma system special fund established pursuant to section 321-22.5;

���������
(C)
�
0.25 cents per cigarette shall be deposited to the credit of the
community health centers special fund established pursuant to section 321-1.65;
and

���������
(D)
�
0.25 cents per cigarette shall be deposited to the credit of the
emergency medical services special fund established pursuant to section
321-234;

����
(4)
�
Section
245-3(a)(8), after June 30, 2009, and prior to July 1, 2013:

���������
(A)
�
2.0 cents per cigarette shall be deposited to the credit of the
Hawaii cancer research special fund, established pursuant to section 304A-2168,
for research and operating expenses and for capital expenditures;

���������
(B)
�
0.75 cents per cigarette shall be deposited to the credit of the
trauma system special fund established pursuant to section 321-22.5;

���������
(C)
�
0.75 cents per cigarette shall be deposited to the credit of the
community health centers special fund established pursuant to section 321-1.65;
and

���������
(D)
�
0.5 cents per cigarette shall be deposited to the credit of the
emergency medical services special fund established pursuant to section
321-234;

����
(5)
�
Section
245-3(a)(11), after June 30, 2013, and prior to July 1, 2015:

���������
(A)
�
2.0 cents per cigarette shall be deposited to the credit of the
Hawaii cancer research special fund, established pursuant to section 304A-2168,
for research and operating expenses and for capital expenditures;

���������
(B)
�
1.5 cents per cigarette shall be deposited to the credit of the
trauma system special fund established pursuant to section 321-22.5;

���������
(C)
�
1.25 cents per cigarette shall be deposited to the credit of the
community health centers special fund established pursuant to section 321-1.65;
and

���������
(D)
�
1.25 cents per cigarette shall be deposited to the credit of the
emergency medical services special fund established pursuant to section
321-234; and

����
(6)
�
Section
245-3(a)(11), after June 30, 2015, and thereafter:

���������
(A)
�
2.0 cents per cigarette shall be deposited to the credit of the
Hawaii cancer research special fund, established pursuant to section 304A-2168,
for research and operating expenses and for capital expenditures;

���������
(B)
�
1.125 cents per cigarette, but not more than $7,400,000 in a
fiscal year, shall be deposited to the credit of the trauma system special fund
established pursuant to section 321-22.5;

���������
(C)
�
1.25 cents per cigarette, but not more than $8,800,000 in a
fiscal year, shall be deposited to the credit of the community health centers
special fund established pursuant to section 321-1.65; and

���������
(D)
�
1.25 cents per cigarette, but not more than $8,800,000 in a
fiscal year, shall be deposited to the credit of the emergency medical services
special fund established pursuant to section 321-234.
]

����
(1)
�
Beginning
July 1, 2025, twenty-five per cent or $14,080,000, whichever is less, shall be
deposited to the credit of the Hawaii cancer research special fund, established
pursuant to section 304A-2168, for research and operating expenses and for
capital expenditures;

����
(2)
�
Beginning
July 1, 2025, twenty-five per cent or $7,400,000, whichever is less, shall be
deposited to the credit of the trauma system special fund established pursuant
to section 321-22.5;

����
(3)
�
Beginning
July 1, 2025, twenty-five per cent or $8,800,000, whichever is less, shall be
deposited to the credit of the community health centers special fund
established pursuant to section 321-1.65; and

����
(4)
�
Beginning
July 1, 2025, twenty-five per cent or $8,800,000, whichever is less, shall be
deposited to the credit of the emergency medical services special fund
established pursuant to section 321-234.

The
department shall provide an annual accounting of these dispositions to the
legislature.
"

����
SECTION 3.
�

Statutory material to be repealed is bracketed and stricken.
�
New statutory material is underscored.

����
SECTION 4.
�

This Act shall take effect on July 1, 2025.

INTRODUCED BY:

_____________________________

BY REQUEST

Report Title:

Cigarette Tax; Tobacco Tax; Disposition of Revenues

Description:

Increases the tax rates for cigarettes and little cigars beginning
1/1/2026, amends the disposition of tax revenues to certain non-general funds
starting from fiscal year 2026-2027, with the excess carrying over to the
general fund, and expands the tax disposition of tax revenues to the funds to
include all tobacco product taxes.
�

Repeals obsolete historical tax rates.

The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.