RELATING TO TAXATION.

Elections Taxes

Active

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

Sponsor: EVSLIN, GRANDINETTI, HASHEM, HOLT, ILAGAN, KAHALOA, KAPELA, LEE, M., LOWEN, MATAYOSHI, PERRUSO, POEPOE, SAYAMA, TARNAS
Last action: 2026-03-30
Official status: Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM.
Effective date: Not listed

Plain English Breakdown

The effective date is set very far in the future (January 1, 3028), which may change before then.

Tax on Business Ownership Transfers

This bill imposes a conveyance tax on the transfer of controlling interests in entities owning real property, with certain exceptions and at specific rates.

What This Bill Does

Imposes a conveyance tax on transfers of controlling interests in entities owning real property when there is valuable consideration involved.
Does not apply this tax to changes in ownership identity or form where beneficial ownership does not change.
Applies the lowest rate of conveyance tax to certain types of real property transfers, such as those from a dissolving partnership to its corporate general partner.
Requires transferees to be liable for taxes if transferors do not pay them.

Who It Names or Affects

Business entities and individuals transferring controlling interests in businesses that own real property.
Transferees who may be liable for taxes if transferors do not pay them.

Terms To Know

Controlling interest: Fifty percent or more of the total combined voting power in a corporation or fifty percent or more of the capital, profits, or beneficial interest in other entities like partnerships and trusts.
Conveyance tax: A tax imposed on transfers or conveyances of real property or interests therein.

Limits and Unknowns

The bill does not specify the exact rate of the conveyance tax, only that it will be at the lowest rate provided.
It is unclear how this new tax will affect small businesses and startups.

Amendments

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

HD1

Hawaii published version HD1

Plain English: This amendment adds new sections to Hawaii Revised Statutes that impose conveyance taxes on the transfer of controlling interests in entities owning real property.

Adds a new section (247-A) defining when transfers or acquisitions of controlling interests in entities with real property will be subject to conveyance tax.
Includes provisions for determining whether persons are acting in concert and how their actions affect the application of the tax.
Amends existing sections 247-1 and 247-2 to include transfers of controlling interests as taxable events, specifying that taxes should be based on the fair market value of real property owned by the entity at the time of transfer.

The amendment text is complex and includes many legal definitions and exceptions which are not fully explained in plain English.
Details about specific tax rates and exemptions for certain transfers are truncated or omitted, making it difficult to provide a complete summary.

SD1

Hawaii published version SD1

Plain English: This amendment adds new sections to Hawaii Revised Statutes that impose conveyance taxes on the transfer of controlling interests in entities owning real property, and sets rates for such taxes.

Adds a new section (247-A) requiring a conveyance tax when transferring a controlling interest in an entity with real property located in Hawaii.
Modifies Section 247-1 to include transfers of controlling interests as taxable events under the existing conveyance tax law.
Amends Section 247-2 to specify that for transfers or acquisitions of controlling interests, the tax is based on the fair market value of real property owned by the entity at the time of transfer.

The amendment text does not provide specific rates for the new taxes imposed; these details are truncated in the provided material.
Some technical legal language may be difficult to interpret without additional context or explanation.

Bill History

2026-03-30 S
Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM.
2026-03-30 S
Reported from WLA (Stand. Com. Rep. No. 3249) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM.
2026-03-18 S
The committee(s) on WLA recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in WLA were as follows: 4 Aye(s): Senator(s) Lee, C., Inouye, Chang, Lamosao; Aye(s) with reservations: none ; 1 No(es): Senator(s) DeCorte; and 0 Excused: none.
2026-03-16 S
The committee(s) on WLA deferred the measure until 03-18-26 1:05PM; Conference Room 224 & Videoconference.
2026-03-12 S
The committee(s) on WLA has scheduled a public hearing on 03-16-26 1:00PM; Conference Room 224 & Videoconference.
2026-03-10 S
Referred to WLA, WAM.
2026-03-06 S
Passed First Reading.
2026-03-06 S
Received from House (Hse. Com. No. 61).
2026-03-05 H
Passed Third Reading with none voting aye with reservations; Representative(s) Alcos, Garcia, Gedeon, Kong, Matsumoto, Muraoka, Pierick, Reyes Oda, Shimizu voting no (9) and Representative(s) Perruso excused (1). Transmitted to Senate.
2026-03-05 H
Reported from FIN (Stand. Com. Rep. No. 890-26), recommending passage on Third Reading.
2026-03-03 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, Perruso, Templo, Yamashita; Ayes with reservations: Representative(s) Gedeon, Reyes Oda; 1 Noes: Representative(s) Alcos; and Excused: none.
2026-02-27 H
Bill scheduled to be heard by FIN on Tuesday, 03-03-26 10:00AM in House conference room 308 VIA VIDEOCONFERENCE.
2026-02-12 H
Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with Representative(s) Reyes Oda voting aye with reservations; Representative(s) Alcos, Garcia, Gedeon, Matsumoto, Muraoka, Pierick, Shimizu voting no (7) and none excused (0).
2026-02-12 H
Reported from WAL (Stand. Com. Rep. No. 243-26) as amended in HD 1, recommending passage on Second Reading and referral to FIN.
2026-02-05 H
The committee on WAL recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 7 Ayes: Representative(s) Hashem, Morikawa, Belatti, Ichiyama, Poepoe, Woodson, Souza; Ayes with reservations: none; 1 Noes: Representative(s) Shimizu; and 1 Excused: Representative(s) Iwamoto.
2026-02-02 H
Bill scheduled to be heard by WAL on Thursday, 02-05-26 9:00AM in House conference room 411 VIA VIDEOCONFERENCE.
2026-01-28 H
Referred to WAL, FIN, referral sheet 3
2026-01-26 H
Introduced and Pass First Reading.
2026-01-23 H
Pending introduction.

Official Summary Text

RELATING TO TAXATION.
Conveyance Tax; Controlling Interest Transfer
Imposes conveyance tax on the transfer of a controlling interest of an entity with an interest in real property. Stipulates that the imposition of the conveyance tax on transfers of entity ownership shall not apply to any transfer of interest or acquisition between entities wholly owned by the same common ownership that results in no change in the beneficial ownership. Imposes the conveyance tax on certain transfers of real property at the lowest tax rate. Imposes liability on the transferee in the event that the transferor of the controlling interest does not pay the tax due. Effective 1/1/3028. (SD1)

Current Bill Text

Read the full stored bill text

HB1918

HOUSE OF REPRESENTATIVES

H.B. NO.

1918

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to Taxation
.

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

����
SECTION 1.
�
The legislature finds that the transfer of
ownership of a business entity is comparable to the sale of an interest in real
property held by the entity.
�
The
legislature believes that all transfers of possession or use of real property
should be subject to the same conveyance tax obligations.

����
The purpose of this Act is to impose
the conveyance tax on transfers of entity ownership when the transfer of entity
ownership is essentially equivalent to the sale of an interest in real
property.

����
SECTION 2.
�
Chapter 247, Hawaii Revised Statutes, is
amended by adding two new sections to be appropriately designated and to read
as follows:

����
"
�247-A
�
Transfer of a
controlling interest; applicability.
�

(a)
�
Notwithstanding any
provision to the contrary, the tax imposed by section 247-1 shall apply to the
transfer or acquisition, or a series of transfers or acquisitions, including
those combined with otherwise exempt transfers, by any person or entity acting
alone or in concert, within any twelve-month period, that result in:

����
(1)
�
The
transfer of a controlling interest in an entity with an interest in real
property located in this State for valuable consideration; and

����
(2)
�
The transfer of
control or ownership of the real property located in this State;

provided that this section shall not apply to any
transfer or acquisition that consists of the mere change in identity or form of
ownership of an entity where there is no change in the beneficial ownership,
including transfers to an entity wholly owned, directly or indirectly, by the
same common ownership as the transferor.

����
(b)
�
For the purpose of determining whether,
pursuant to the exercise of an option, a controlling interest was transferred
or acquired within a twelve-month period, the date that the option agreement
was executed shall be the date on which the transfer or acquisition of the
controlling interest is deemed to occur.
�

For all other purposes under this chapter, the date upon which the
option is exercised shall be the date of the transfer or acquisition of the
controlling interest.

����
(c)
�
For the purposes of this section with regard
to persons acting in concert:

����
(1)
�
All
acquisitions of persons acting in concert shall be aggregated for the purpose
of determining whether a transfer or acquisition of a controlling interest has
taken place;

����
(2)
�
Persons shall
be considered as acting in concert when they have a relationship with each
other such that one person influences or controls the actions of another
through common ownership;

����
(3)
�
Persons shall
be considered to be acting in concert only when the unity with which the
purchasers negotiate and consummate the transfer of ownership interests
supports a finding that the persons are acting as a single entity; and

����
(4)
�
If acquisitions
are completely independent and each purchaser purchases without regard to the
identity of the other purchasers, then the acquisitions shall be considered
separate acquisitions.

����
(d)
�
As used in this section, "controlling
interest" means:

����
(1)
�
In the case of
a corporation, either fifty per cent or more of the total combined voting power
of all classes of stock of the corporation entitled to vote, or fifty per cent
or more of the capital, profits, or beneficial interest in the voting stock of
the corporation; and

����
(2)
�
In the case of
a partnership, association, trust, or other entity, fifty per cent or more of
the capital, profits, or beneficial interest in the partnership, association, trust,
or other entity.

����
(e)
�
The director shall adopt rules pursuant to
chapter 91 to implement this section, including rules for determining whether
persons are acting in concert for the purpose of transferring or acquiring a
controlling interest.

����
�
247-B
�
Taxation at the
lowest rate.
�
The tax imposed
by section 247-1 shall apply to the following at the lowest rate provided in
section 247-2(1), regardless of the value of the real property:

����
(1)
�
Any document or
instrument conveying real property, or any interest therein, from an entity
that is a party to a merger or consolidation under chapter 414, 414D, 415A,
421, 421C, 425, 425E, or 428 to the surviving or new entity;

����
(2)
�
Any document or
instrument conveying real property, or any interest therein, from a dissolving
limited partnership to its corporate general partner that owns, directly or
indirectly, at least a ninety per cent interest in the partnership, determined
by applying section 318 (with respect to constructive ownership of stock) of
the Internal Revenue Code of 1986, as amended, to the constructive ownership of
interests in the partnership;

����
(3)
�
Any
document or instrument conveying real property to any nonprofit or for-profit
organization that has been certified by the Hawaii housing finance and
development corporation for low-income housing development; and

����
(4)
�
Any
document or instrument conveying real property, or any interest therein, to or
from a wholly-owned corporation or limited liability company.
"

����
SECTION
3
.
�
Section 247-1,
Hawaii Revised Statutes, is amended to read as follows:

����
"
�247-1
�
Imposition of tax.
�
There is hereby imposed and shall be levied,
collected, and paid, a tax as hereinafter provided, on all transfers or
conveyances of realty
located in the State
or any interest therein, by
way of deeds, leases, subleases, assignments of lease, agreements of sale,
assignments of agreement of sale, instruments, writings, and any other
document, whereby any lands, interests in land, tenements, or other realty sold
shall be granted, assigned, transferred, or otherwise conveyed to, or vested
in, the purchaser or purchasers, lessee or lessees, sublessee or sublessees,
assignee or assignees, or any other person or persons, by the person's or their
direction[
.
]
, including a transfer of a controlling interest as that
term is defined in section 247-A.
"

����
SECTION
4
.
�
Section 247-3,
Hawaii Revised Statutes, is amended to read as follows:

����
"
�247-3
�
Exemptions.
�
The tax imposed by section 247-1 shall not
apply to:

����
(1)
�
Any document or
instrument that is executed prior to January 1, 1967;

����
(2)
�
Any document or
instrument that is given to secure a debt or obligation;

����
(3)
�
Any document or
instrument that only confirms or corrects a deed, lease, sublease, assignment,
transfer, or conveyance previously recorded or filed;

����
(4)
�
Any document or
instrument between husband and wife, reciprocal beneficiaries, or parent and
child, in which only a nominal consideration is paid;

����
(5)
�
Any document or
instrument in which there is a consideration of $100 or less paid or to be
paid;

����
(6)
�
Any document or
instrument conveying real property that is executed pursuant to an agreement of
sale, and where applicable, any assignment of the agreement of sale, or
assignments thereof; provided that the taxes under this chapter have been fully
paid upon the agreement of sale, and where applicable, upon such assignment or
assignments of agreements of sale;

����
(7)
�
Any deed, lease,
sublease, assignment of lease, agreement of sale, assignment of agreement of
sale, instrument or writing in which the United States or any agency or
instrumentality thereof or the State or any agency, instrumentality, or
governmental or political subdivision thereof are the only parties thereto;

����
(8)
�
Any document or
instrument executed pursuant to a tax sale conducted by the United States or
any agency or instrumentality thereof or the State or any agency,
instrumentality, or governmental or political subdivision thereof for
delinquent taxes or assessments;

����
(9)
�
Any document or
instrument conveying real property to the United States or any agency or
instrumentality thereof or the State or any agency, instrumentality, or
governmental or political subdivision thereof pursuant to the threat of the
exercise or the exercise of the power of eminent domain;

���
(10)
�
Any document or
instrument that solely conveys or grants an easement or easements;

���
(11)
�
Any document or
instrument whereby owners partition their property, whether by mutual agreement
or judicial action; provided that the value of each owner's interest in the
property after partition is equal in value to that owner's interest before
partition;

���
(12)
�
Any document or
instrument between marital partners or reciprocal beneficiaries who are parties
to a divorce action or termination of reciprocal beneficiary relationship that
is executed pursuant to an order of the court in the divorce action or termination
of reciprocal beneficiary relationship;

���
(13)
�
Any document or
instrument conveying real property from a testamentary trust to a beneficiary
under the trust;
and

���
(14)
�
Any document or
instrument conveying real property from a grantor to the grantor's revocable
living trust, or from a grantor's revocable living trust to the grantor as
beneficiary of the trust[
;

���
(15)
�
Any document or
instrument conveying real property, or any interest therein, from an entity
that is a party to a merger or consolidation under chapter 414, 414D, 415A,
421, 421C, 425, 425E, or 428 to the surviving or new entity;

���
(16)
�
Any document or
instrument conveying real property, or any interest therein, from a dissolving
limited partnership to its corporate general partner that owns, directly or
indirectly, at least a ninety per cent interest in the partnership, determined
by applying section 318 (with respect to constructive ownership of stock) of
the federal Internal Revenue Code of 1986, as amended, to the constructive
ownership of interests in the partnership; and

���
(17)
�
Any document or
instrument that conforms to the transfer on death deed as authorized under
chapter 527
]."

����
SECTION 5.
�
In codifying the new sections added by
section 2 of this Act, the revisor of statutes shall substitute appropriate
section numbers for the letters used in designating the new sections in this
Act.

����
SECTION
6.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION 7.
�
This Act shall take effect on July 1, 2026.

INTRODUCED BY:

_____________________________

Report Title:

Conveyance
Tax; Controlling Interest Transfer

Description:

Imposes
conveyance tax on the transfer of a controlling interest of an entity with an
interest in real property.
�
Stipulates
that the imposition of the conveyance tax on transfers of entity ownership
shall not apply to any transfer of interest or acquisition between entities
wholly owned by the same common ownership that results in no change in the
beneficial ownership.
�
Imposes the
conveyance tax on certain transfers of real property at the lowest tax rate.

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