HB1688 • 2026

RELATING TO A GENERAL EXCISE TAX EXEMPTION FOR AIRCRAFT MAINTENANCE.

Taxes

Enacted

This bill passed the Legislature and reached final enactment based on the latest official action.

Sponsor: KILA, ILAGAN, TAM
Last action: 2026-05-19
Official status: Act 020, on 05/19/2026 (Gov. Msg. No. 1120).
Effective date: Not listed

Plain English Breakdown

The official source material does not provide information about correcting a specific court decision, only the context for why such an exemption is needed.

Tax Break for Aircraft Maintenance

This law removes the general excise tax on materials, parts, and tools used for aircraft service and maintenance or for building an aircraft maintenance facility.

What This Bill Does

Removes the general excise tax on materials, parts, and tools needed for aircraft service and maintenance.
Exempts from tax the sale of items used in building an aircraft maintenance facility.

Who It Names or Affects

Aircraft carriers who buy parts or materials for their planes.
Companies that build facilities to maintain and repair airplanes.

Terms To Know

General Excise Tax: A tax on the sale of goods and services in Hawaii.
Air Carrier: An airline company that transports passengers or cargo by air.

Limits and Unknowns

The law only affects sales after January 1, 2027.
It does not change taxes on other types of goods and services.

Amendments

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

CD1

Hawaii published version CD1

Plain English: HB1688 CD1 HOUSE OF REPRESENTATIVES H.B.

HB1688 CD1 HOUSE OF REPRESENTATIVES H.B.
NO.
1688 THIRTY-THIRD LEGISLATURE, 2026 H.D.
1 STATE OF HAWAII S.D.

HD1

Hawaii published version HD1

Plain English: HB1688 HD1 HOUSE OF REPRESENTATIVES H.B.

HB1688 HD1 HOUSE OF REPRESENTATIVES H.B.
NO.
1688 THIRTY-THIRD LEGISLATURE, 2026 H.D.
1 STATE OF HAWAII A BILL FOR AN ACT RELATING TO A GENERAL EXCISE TAX EXEMPTION FOR AIRCRAFT MAINTENANCE .

SD1

Hawaii published version SD1

Plain English: HB1688 SD1 HOUSE OF REPRESENTATIVES H.B.

HB1688 SD1 HOUSE OF REPRESENTATIVES H.B.
NO.
1688 THIRTY-THIRD LEGISLATURE, 2026 H.D.
1 STATE OF HAWAII S.D.

SD2

Hawaii published version SD2

Plain English: HB1688 SD2 HOUSE OF REPRESENTATIVES H.B.

HB1688 SD2 HOUSE OF REPRESENTATIVES H.B.
NO.
1688 THIRTY-THIRD LEGISLATURE, 2026 H.D.
1 STATE OF HAWAII S.D.

Bill History

2026-05-19 H
Act 020, on 05/19/2026 (Gov. Msg. No. 1120).
2026-05-19 S
Act 020, 05/19/2026 (Gov. Msg. No. 1120).
2026-05-08 S
Received notice of passage on Final Reading in House (Hse. Com. No. 888).
2026-05-07 H
Transmitted to Governor.
2026-05-06 H
Received notice of Final Reading (Sen. Com. No. 816).
2026-05-06 H
Passed Final Reading as amended in CD 1 with Representative(s) Amato voting aye with reservations; Representative(s) Iwamoto voting no (1) and none excused (0).
2026-05-06 S
Passed Final Reading, as amended (CD 1). Ayes, 25; Aye(s) with reservations: none . 0 No(es): none. 0 Excused: none.
2026-04-29 S
48 Hrs. Notice (as amended CD 1) 05-06-26
2026-04-29 S
Reported from Conference Committee as amended CD 1 (Conf. Com. Rep. No. 54-26).
2026-04-29 H
Forty-eight (48) hours notice Wednesday, 05-06-26.
2026-04-29 H
Reported from Conference Committee (Conf Com. Rep. No. 54-26) as amended in (CD 1).
2026-04-29 H
The Conference Committee recommends that the measure be Passed, with Amendments. The votes were as follows: 3 Ayes: Representative(s) Kila, Takenouchi, Cochran; Ayes with reservations: none; 0 Noes: none; and 0 Excused: none.
2026-04-29 S
The Conference committee recommends that the measure be PASSED, WITH AMENDMENTS. The votes of the Senate Conference Managers were as follows: 2 Aye(s): Senator(s) Inouye, Kanuha; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Lee, C..
2026-04-28 S
Conference committee meeting to reconvene on 04-29-26 9:30AM; Conference Room 329.
2026-04-28 S
Conference committee meeting to reconvene on 04-28-26 10:20 AM; Conference Room 329.
2026-04-27 S
Conference committee meeting to reconvene on 04-28-26 9:30AM; Conference Room 329.
2026-04-24 S
Conference committee meeting scheduled for 04-27-26 9:31AM; Conference Room 329.
2026-04-23 S
Received notice of appointment of House conferees (Hse. Com. No. 817).
2026-04-23 H
House Conferees Appointed: Kila, Takenouchi Co-Chairs; Cochran.
2026-04-23 H
Received notice of Senate conferees (Sen. Com. No. 725).
2026-04-22 S
Senate Conferees Appointed: Inouye Chair; Kanuha Co-Chair; Lee, C..
2026-04-17 S
Received notice of disagreement (Hse. Com. No. 780).
2026-04-16 H
House disagrees with Senate amendment (s).
2026-04-14 H
Returned from Senate (Sen. Com. No. 602) in amended form (SD 2).
2026-04-14 S
Report adopted; Passed Third Reading, as amended (SD 2). Ayes, 25; Aye(s) with reservations: none . Noes, 0 (none). Excused, 0 (none). Transmitted to House.
2026-04-09 S
48 Hrs. Notice 04-14-26.
2026-04-09 S
Reported from WAM (Stand. Com. Rep. No. 3684) with recommendation of passage on Third Reading, as amended (SD 2).
2026-04-06 S
The committee(s) on WAM recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in WAM were as follows: 12 Aye(s): Senator(s) Dela Cruz, Moriwaki, DeCoite, Elefante, Hashimoto, Inouye, Kanuha, Kidani, Kim, Richards, Wakai, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Lee, C..
2026-04-01 S
The committee(s) on WAM deferred the measure until 04-06-26 10:31AM; Conference Room 211 & Videoconference.
2026-03-30 S
Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM.
2026-03-30 S
The committee(s) on WAM will hold a public decision making on 04-01-26 10:03AM; Conference Room 211 & Videoconference.
2026-03-30 S
Reported from TRS (Stand. Com. Rep. No. 3278) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM.
2026-03-24 S
The committee(s) on TRS recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in TRS were as follows: 5 Aye(s): Senator(s) Inouye, Elefante, Kanuha, Lee, C., DeCorte; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none.
2026-03-20 S
The committee(s) on TRS has scheduled a public hearing on 03-24-26 3:02PM; Conference Room 229 & Videoconference.
2026-03-12 S
Referred to TRS, WAM.
2026-03-12 S
Passed First Reading.
2026-03-12 S
Received from House (Hse. Com. No. 263).
2026-03-10 H
Passed Third Reading with none voting aye with reservations; Representative(s) Iwamoto voting no (1) and Representative(s) Kong, Pierick excused (2). Transmitted to Senate.
2026-03-06 H
Reported from FIN (Stand. Com. Rep. No. 1164-26), recommending passage on Third Reading.
2026-03-05 H
The committee on FIN recommend that the measure be PASSED, UNAMENDED. The votes were as follows: 15 Ayes: Representative(s) Todd, Takenouchi, Hartsfield, Hussey, Keohokapu-Lee Loy, Kitagawa, Kusch, Lee, M., Miyake, Morikawa, Templo, Yamashita, Alcos, Gedeon, Reyes Oda; Ayes with reservations: none; Noes: none; and 1 Excused: Representative(s) Perruso.
2026-03-03 H
Bill scheduled to be heard by FIN on Thursday, 03-05-26 2:00PM in House conference room 308 VIA VIDEOCONFERENCE.
2026-02-17 H
Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Lee, M., Poepoe excused (3).
2026-02-17 H
Reported from TRN (Stand. Com. Rep. No. 286-26) as amended in HD 1, recommending passage on Second Reading and referral to FIN.
2026-02-12 H
The committee on TRN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 7 Ayes: Representative(s) Kila, Miyake, Cochran, Evslin, Kitagawa, La Chica, Muraoka; Ayes with reservations: none; Noes: none; and 2 Excused: Representative(s) Grandinetti, Pierick.
2026-02-10 H
Bill scheduled to be heard by TRN on Thursday, 02-12-26 8:30AM in House conference room 430 VIA VIDEOCONFERENCE.
2026-01-26 H
Referred to TRN, FIN, referral sheet 1
2026-01-21 H
Introduced and Pass First Reading.
2026-01-20 H
Prefiled.

Official Summary Text

RELATING TO A GENERAL EXCISE TAX EXEMPTION FOR AIRCRAFT MAINTENANCE.
Taxation; General Excise Tax; Aircraft Service and Maintenance
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)

Current Bill Text

Read the full stored bill text

HB1688

HOUSE OF REPRESENTATIVES

H.B. NO.

1688

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to a general excise tax exemption for aircraft maintenance
.

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

����
SECTION 1.
�
The legislature finds that many states,
including Arizona, California, Colorado, Connecticut, Florida, Georgia, Iowa,
Kansas, Massachusetts, Minnesota, New York, North Carolina, Ohio, Pennsylvania,
Texas, and Wisconsin, explicitly exempt aircraft parts from their sales tax if
sold to an air carrier.
�
In Hawaii, there
is an exemption in the general excise tax law for aircraft servicing and
maintenance.
�
However, the Hawaii
Intermediate Court of Appeals has recently decided that the exemption language does
not exempt from the general excise tax the sale of parts to an air carrier,
even though the complementary use tax law explicitly exempts from the use tax
imports of these parts from an out-of-state seller.
�
To correct this imbalance, recognize the
critical importance of the airline industry to the State, and ensure
competitiveness with other states, including those listed above, in attracting
and maintaining aircraft maintenance jobs and facilities, the purpose of this Act
is to provide a general excise tax exemption for the sale of material, parts,
or tools that are used for aircraft service and maintenance or for the
construction of an aircraft service and maintenance facility.

����
SECTION
2
.
�
Section 237-24.9, Hawaii Revised Statutes, is
amended by amending its title and subsection (a) to read as follows:

����
"
�237-24.9
�

Aircraft service [
and
]
,
maintenance facility[
.
]
,
and sale of related materials.
�

(a)
�
This chapter shall not apply
to amounts received from the servicing and maintenance of aircraft [
or
]
,

from the construction of an aircraft service and maintenance facility in the State[
.
]
,
or from the sale of material, parts, or tools to an air carrier if they are
purchased for aircraft service and maintenance or for the construction of an
aircraft service and maintenance facility.
"

����
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, 2026.

INTRODUCED BY:

_____________________________

Report Title:

Taxation;
General Excise Tax; Aircraft Service and Maintenance

Description:

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.

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