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HB1235 • 2026

RELATING TO A WEALTH ASSET TAX.

RELATING TO A WEALTH ASSET TAX.

Taxes
Active

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

Sponsor
KAPELA, AMATO, GRANDINETTI, IWAMOTO, LA CHICA
Last action
2025-12-08
Official status
Carried over to 2026 Regular Session.
Effective date
Not listed

Plain English Breakdown

The bill does not provide specific details on how the tax revenue will be used.

Wealth Asset Tax Law

This bill establishes a wealth asset tax of one percent on the state net worth above $20 million for individuals with more than $20 million in assets in Hawaii.

What This Bill Does

  • Creates a wealth asset tax of one percent on the part of an individual's state net worth that is more than $20 million.
  • Defines 'state net worth' to include various types of assets such as real estate, stocks, bonds, and other financial holdings.
  • Requires married individuals with over $20 million in assets to file separate returns for this tax.
  • Allows taxpayers who pay wealth asset tax on the same assets in another state to subtract that amount from their Hawaii tax liability.

Who It Names or Affects

  • Individuals with more than $20 million in assets in Hawaii will be required to pay this new tax.
  • The Department of Taxation is responsible for implementing and enforcing the wealth asset tax rules.

Terms To Know

State Net Worth
Total value of all financial holdings, including real estate, stocks, bonds, and other assets, that a person owns in Hawaii.
Wealth Asset Tax
A tax on the part of an individual's state net worth above $20 million for those with over $20 million in assets in Hawaii.

Limits and Unknowns

  • The exact rules and methods for calculating and reporting wealth asset taxes will be determined by the Department of Taxation before the start of the 2026 regular session.
  • This bill does not specify how the tax revenue from this new law will be used.

Bill History

  1. 2025-12-08 D

    Carried over to 2026 Regular Session.

  2. 2025-01-27 H

    Referred to FIN, referral sheet 4

  3. 2025-01-23 H

    Introduced and Pass First Reading.

  4. 2025-01-22 H

    Pending introduction.

Official Summary Text

RELATING TO A WEALTH ASSET TAX.
Department of Taxation; Wealth Asset Tax; Wealth Tax; State Net Worth
Establishes a wealth asset tax of one per cent of the state net worth of each individual taxpayer who holds $20,000,000 or more in assets in the State.

Current Bill Text

Read the full stored bill text 
HB1235

HOUSE OF REPRESENTATIVES

H.B. NO.

1235

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

RELATING TO A WEALTH ASSET TAX
.

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

����
SECTION 1.
�
The Hawaii
Revised Statutes is amended by adding a new chapter to be appropriately designated
and to read as follows:

"
Chapter

wealth asset tax

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� -1
�
Definitions.
�
As used in this chapter:

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"Department" means the department
of taxation.

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"Director" means the director of
taxation.

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"Taxpayer" means a person subject
to a tax imposed by this chapter, including individuals, estates, and trusts.

����
� -2
�
Imposition of tax.
�
There is hereby imposed and shall be levied,
collected, and paid, a tax on the activity of sustaining excessive
accumulations of wealth by every qualified taxpayer.

����
� -3
�
Basis and rate; wealth asset tax.
�
(a)
�

The tax imposed by section -2 shall be one per cent of
the state net worth in excess of $20,000,000 for each individual taxpayer who
holds more than $20,000,000 in assets in the State; provided that the
individual taxpayer's net worth shall be based on the individual's assets, not
joint assets, and a married individual shall file a separate return; provided
further that if the taxpayer pays a wealth asset tax on the same asset in a
different state, the amount paid to the other state shall be subtracted from
the state tax liability.

����
(b)
�

A taxpayer's state net worth shall be determined pursuant to rules
adopted by the department; provided that a taxpayer's state net worth shall
include but not be limited to the aggregate value of assets in the following
categories:

����
(1)
�
Real
Property;

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(2)
�
Stock
in any publicly and privately traded C‑corporation;

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(3)
�
Stock
in any S‑corporation;

����
(4)
�
Interests
in any partnership;

����
(5)
�
Interests
in any private equity or hedge fund;

����
(6)
�
Interests
in any other noncorporate business;

����
(7)
�
Bonds
and interest-bearing savings accounts;

����
(8)
�
Cash
and deposits;

����
(9)
�
Farm
assets;

���
(10)
�
Interest
in mutual funds or index funds;

���
(11)
�
Put
and call options on securities;

���
(12)
�
Futures
contracts;

���
(13)
�
Art
and collectables;

���
(14)
�
Financial
assets held offshore;

���
(15)
�
Pension
funds;

���
(16)
�
Debts
owed to the taxpayer; and

���
(17)
�
Other
assets.

����
� -4
�
Reporting and payment.
�
(a)
�

Assets used to determine state net worth pursuant to section
-3(b) shall be reported in a form and manner specified by the
director.

����
(b)
�

The tax imposed by this chapter shall be reported with, and payable at
the same time as, taxes imposed pursuant to chapter 235.

����
� -5
�
Assets belonging to dependents.
�
For the purpose of determining state net
worth and tax liability under this chapter, any assets belonging to a person
who can be claimed as a dependent that are in excess of $50,000 shall be deemed
to be assets of the taxpayer who can claim the person as a dependent.

����
� -6
�
Valuation of assets.
�
Valuation or appraisal of assets reported
pursuant to section -3(b) shall be done in a manner specified
by the director in accordance with rules adopted by the department.

����
� -7

�
Forms.

�
The director shall prescribe forms to be used
in filing returns and reports required by this chapter.

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� -8
�
Rules.
��

The department shall adopt rules in accordance with chapter
91 to implement this chapter."

����
SECTION 2.
�

The department of taxation shall submit proposed legislation suggesting
the types of debts to be considered in determining net worth, methods to be
used for valuation of assets, time periods for which valuation of assets shall
occur, methods for allocation and apportionment, withholding requirements,
reporting requirements, limitation periods, and audit and assessment provisions
for the wealth asset tax established by this Act to the legislature no later
than forty days prior to the convening of the regular session of 2026.

����
SECTION 3.
�

If any provision of this Act, or the application thereof to any person
or circumstance, is held invalid, the invalidity does not affect other
provisions or applications of the Act that can be given effect without the
invalid provision or application, and to this end the provisions of this Act
are severable.

����
SECTION 4.
�

This Act, upon its approval, shall apply to taxable years beginning
after December 31, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Department
of Taxation; Wealth Asset Tax; Wealth Tax; State Net Worth

Description:

Establishes
a wealth asset tax of one per cent of the state net worth of each individual
taxpayer who holds $20,000,000 or more in assets in the State.

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