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HB232
HOUSE OF REPRESENTATIVES
H.B. NO.
232
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:
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SECTION
1.
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The legislature finds that Hawaii has
one of the highest costs of living in the nation, making it difficult for many
low- and middle-income households and working families to afford basic
necessities.
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Additionally, Native
Hawaiians are disproportionally affected by poverty and other economic
challenges.
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The
legislature further finds that the population living on Oahu's west coast,
which has a significant Native Hawaiian and Pacific islander population,
experiences the highest percentage of residents living below the poverty level
in the city and county of Honolulu.
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Reducing
the tax burden for these communities would provide immediate financial relief,
enabling families to afford basic necessities like housing, food,
transportation, and education.
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The
purpose of this Act is to establish a two-year pilot program that reduces the
income tax liability for certain residents within the 96792 postal zip code on
the island of Oahu.
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SECTION
2.
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(a)
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The department of taxation shall establish a two-year pilot program that
reduces the income tax liability for certain residents within the 96792 postal
zip code on the island of Oahu.
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(b)
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The reduction of income tax liability shall
be as follows:
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(1)
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If the adjusted gross income for a household
is not over $ , the
reduction of income tax liability shall be fifty per cent;
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(2)
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If the adjusted gross income for a household
is over $ but not
over $ , the
reduction of income tax liability shall be thirty per cent;
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(3)
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If the adjusted gross income for a household
is over $ but not
over $ , the
reduction of income tax liability shall be ten per cent; and
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(4)
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If the taxable income for a household is over
$ , the reduction of
income tax liability shall be zero per cent.
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(c)
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Individuals who are eligible to participate
in the pilot program shall have continuously held a principal residence within
the 96792 postal zip code area since at least January 1, 2023, and have filed a
resident state income tax return for taxable years 2023 and 2024 and each
taxable year the individual participates in the pilot program, unless the
individual had no taxable income for any taxable year.
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Copies of tax filings, utility bills, leases,
rental agreements, deed or title to real property, or other proof of residency,
as determined by the department of taxation, shall be submitted and verified by
the department prior to participation in the pilot program.
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(d)
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The director of taxation shall prepare forms
as may be necessary for taxpayers to participate in the pilot program.
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The director may also require the taxpayer to
furnish information to verify their eligibility to participate in the pilot
program and may adopt rules necessary to effectuate the purposes of this Act.
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(e)
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The department of taxation shall submit a
report on the financial impact of the pilot program, including total savings by
residents, and recommendations on the pilot program, including any proposed
legislation, to the legislature no later than twenty days prior to the
convening of the regular session of 2028.
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SECTION 3.
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This Act shall take effect upon its approval
and apply to taxable years beginning after December 31, 2024, and shall be
repealed on December 31, 2026.
INTRODUCED BY:
_____________________________
Report Title:
Income
Tax Reduction Pilot Program; Department of Taxation
Description:
Requires
the department of taxation to establish a two-year pilot program
that
reduces the income tax liability for certain residents within the 96792 postal
zip code on the island of Oahu.
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Establishes eligibility and reporting requirements.
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Repeals 12/31/2027.
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.