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HB2156
HOUSE OF REPRESENTATIVES
H.B. NO.
2156
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:
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SECTION
1.
�
The legislature finds that small businesses in the State are
disproportionately burdened with administrative requirements, including the
need to file frequent tax returns under outdated filing thresholds.
�
The filing thresholds for the general excise
tax and transient accommodations tax have not been adjusted since 2001 when the
legislature enacted Act 8, Third Special Session Laws of Hawaii 2001.
�
Since that time, inflation has increased by approximately
1.83 times, resulting in many small businesses being required to file more
frequently than originally intended despite their actual tax liability
remaining relatively small.
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Under
existing general excise tax filing thresholds established in 2001, a taxpayer
that has an annual general excise tax liability of $4,000 or more must file a
monthly general excise tax return.
�
This
filing threshold equates to gross taxable proceeds of approximately $100,000
per year.
�
An annual general excise tax
liability of less than $4,000, but more than $2,000, would require the taxpayer
to file general excise tax returns quarterly and a taxpayer that has an annual
general excise tax liability less than $2,000 must file semiannual general
excise tax returns.
�
For semiannual
filers that equates to gross taxable proceeds of less than approximately $50,000
per year.
�
However, if the thresholds were
adjusted to reflect inflation since 2001, the approximate, equivalent increase
in the filing thresholds would be $7,320 of tax liability, or taxable gross proceeds
of sale of $183,000, for monthly filers and $3,660 of tax liability, or taxable
gross proceeds of sale under $91,500, for semiannual filers.
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The legislature further finds that the
department of taxation is operating with significant staffing constraints, with
a thirty-three per cent vacancy rate as reported in the 2025 Vacancy Rate
Report required by Act 57, Session Laws of Hawaii 2019.
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This combination of frequent filings and
limited administrative capacity places additional strain on the department of
taxation's ability to provide timely assistance, enforce compliance, and
process returns efficiently.
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The legislature believes that increasing
the filing threshold would better align with existing economic conditions,
thereby reducing any unnecessary compliance costs for small businesses in the
State while also allowing the department of taxation to focus its limited
resources elsewhere.
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Accordingly,
the purpose of this Act is to increase the filing thresholds for the general
excise tax and transient accommodations tax.
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SECTION
2
.
�
Section 231-8.5, Hawaii Revised Statutes, is
amended by amending subsection (b) to read as follows:
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"
(b)
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If the requirements of subsection (c) are
satisfied, the department may require electronic filing of any tax return,
application, report, or other document required under the provisions of title
14 administered by the department for the following taxpayers:
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(1)
�
For withholding tax filings required under
chapter 235, only employers whose total tax liability under sections 235-61 and
235-62 for the calendar or fiscal year exceeds $40,000;
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(2)
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For income tax filings required under chapter
235, only taxpayers who are subject to tax under section 235-71, 235-71.5, or
235-72;
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(3)
�
For general excise tax filings required under
chapter 237, only taxpayers whose total tax liability under chapter 237 for the
calendar or fiscal year exceeds [
$4,000;
]
$ ;
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(4)
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For transient accommodations tax filings
required under chapter 237D, only operators and plan managers whose total tax
liability under chapter 237D for the calendar or fiscal year exceeds [
$4,000;
]
$ ;
and
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(5)
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For filings required under the following
chapters, all taxpayers subject to tax under those chapters:
���������
(A)
�
236E;
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(B)
�
239;
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(C)
�
241;
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(D)
�
243;
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(E)
�
244D;
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(F)
�
245; and
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(G)
�
251.
"
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SECTION 3.
�
Section 237-30, Hawaii Revised Statutes, is
amended by amending subsections (b) and (c) to read as follows:
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"
(b)
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Notwithstanding subsection (a), the director
of taxation, for good cause, may permit a taxpayer to file the taxpayer's
return required under this section and make payments thereon:
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(1)
�
On a quarterly basis during the calendar or
fiscal year, the return and payment to be made on or before the twentieth day
of the calendar month after the close of each quarter, to wit:
�
for calendar year taxpayers, on or before
April 20, July 20, October 20, and January 20 or, for fiscal year taxpayers, on
or before the twentieth day of the fourth month, seventh month, and tenth month
following the beginning of the fiscal year and on or before the twentieth day
of the month following the close of the fiscal year; provided that the director
is satisfied that the grant of the permit will not unduly jeopardize the
collection of the taxes due thereon and the taxpayer's total tax liability for
the calendar or fiscal year under this chapter will not exceed [
$4,000;
]
$ ;
or
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(2)
�
On a semiannual basis during the calendar or
fiscal year, the return and payment to be made on or before the twentieth day
of the calendar month after the close of each six-month period, to wit:
�
for calendar year taxpayers, on July 20 and
January 20 or, for fiscal year taxpayers, on or before the twentieth day of the
seventh month following the beginning of the fiscal year and on or before the
last day of the month following the close of the fiscal year; provided that the
director is satisfied that the grant of the permit will not unduly jeopardize
the collection of the taxes due thereon and the taxpayer's total tax liability
for the calendar or fiscal year under this chapter will not exceed [
$2,000.
]
$ .
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The
director, for good cause, may permit a taxpayer to make monthly payments based
on the taxpayer's estimated quarterly or semiannual liability, provided the
taxpayer files a reconciliation return at the end of each quarter or at the end
of each six-month period during the calendar or fiscal year, as provided in
this section.
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(c)
�
If a taxpayer filing the taxpayer's return on
a quarterly or semiannual basis, as provided in this section, becomes
delinquent in either the filing of the taxpayer's return or the payment of the
taxes due thereon, or if the liability of a taxpayer, who possesses a permit to
file the taxpayer's return and to make payments on a semiannual basis exceeds [
$2,000
]
$
in general
excise taxes during the calendar year or exceeds [
$4,000
]
$
in general excise taxes during the calendar year if making payments on a
quarterly basis, or if the director determines that any such quarterly or
semiannual filing of return would unduly jeopardize the proper administration
of this chapter, including the assessment or collection of the general excise
tax, the director may, at any time, revoke a taxpayer's permit, in which case
the taxpayer will then be required to file the taxpayer's return and make
payments thereon as herein provided in subsection (a)."
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SECTION 4.
�
Section 237D-6, Hawaii Revised Statutes, is
amended by amending subsections (b) and (c) to read as follows:
����
"(b)
�
Notwithstanding subsection (a), the director
of taxation, for good cause, may permit a taxpayer to file the taxpayer's
return required under this section and make payments thereon:
����
(1)
�
On a quarterly basis during the calendar or
fiscal year, the return and payment to be made on or before the twentieth day
of the calendar month after the close of each quarter, to wit:
�
for calendar year taxpayers, on or before
April 20, July 20, October 20, and January 20 or, for fiscal year taxpayers, on
or before the twentieth day of the fourth month, seventh month, and tenth month
following the beginning of the fiscal year and on or before the twentieth day
of the month following the close of the fiscal year; provided that the director
is satisfied that the grant of the permit will not unduly jeopardize the
collection of the taxes due thereon and the taxpayer's total tax liability for
the calendar or fiscal year under this chapter will not exceed [
$4,000;
]
$ ;
or
����
(2)
�
On a semiannual basis during the calendar or
fiscal year, the return and payment to be made by or before the twentieth day
of the calendar month after the close of each six-month period, to wit:
�
for calendar year taxpayers, on July 20 and
January 20 or, for fiscal year taxpayers, on or before the twentieth day of the
seventh month following the beginning of the fiscal year and on or before the
twentieth day of the month following the close of the fiscal year; provided
that the director is satisfied that the grant of the permit will not unduly
jeopardize the collection of the taxes due thereon and the taxpayer's total tax
liability for the calendar or fiscal year under this chapter will not exceed [
$2,000.
]
$ .
����
The
director, for good cause, may permit a taxpayer to make monthly payments based
on the taxpayer's estimated quarterly or semiannual liability; provided that
the taxpayer files a reconciliation return at the end of each quarter or at the
end of each six-month period during the calendar or fiscal year, as provided in
this section.
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(c)
�
If a taxpayer filing the taxpayer's return on
a quarterly or semiannual basis, as provided in this section, becomes
delinquent in either the filing of the taxpayer's return or the payment of the
taxes due thereon, or if the liability of a taxpayer, who possesses a permit to
file the taxpayer's return and to make payments on a semiannual basis exceeds [
$2,000
]
$
in
transient accommodations taxes during the calendar year or exceeds [
$4,000
]
$
in
transient accommodations taxes during the calendar year if making payments on a
quarterly basis, or if the director determines that any such quarterly or
semiannual filing of return would unduly jeopardize the proper administration
of this chapter, including the assessment or collection of the transient
accommodations tax, the director, at any time, may revoke a taxpayer's permit,
in which case the taxpayer shall then be required to file the taxpayer's return
and make payments thereon as provided in subsection (a)."
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SECTION 5.
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Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.
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SECTION 6.
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This Act shall take effect on July 1, 2026.
INTRODUCED BY:
_____________________________
Report Title:
General
Excise Tax; Transient Accommodations Tax; Filing Threshold; Increase
Description:
Increases
the filing thresholds for the General Excise Tax and Transient Accommodations
Tax.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.