KLS Keeping Law Simple Legislation in plain English

Straight-ahead summaries built from the official bill text. We keep the source links front and center and leave the decision up to you.

Back to Hawaii

HB269 • 2026

RELATING TO TAXATION.

RELATING TO TAXATION.

Taxes
Active

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

Sponsor
ALCOS, GARCIA, WARD
Last action
2025-12-08
Official status
Carried over to 2026 Regular Session.
Effective date
Not listed

Plain English Breakdown

Checked against official source text during the last sync.

Increasing Capital Gains Tax for Nonresidents and Foreign Taxpayers

This bill increases the capital gains tax rates for nonresident and foreign individuals, as well as corporations in those categories.

What This Bill Does

  • Increases the capital gains tax rate to 29% for nonresident individuals with net capital gain income.
  • Raises the capital gains tax rate to 150% for foreign individuals with net capital gain income.
  • Boosts the alternative capital gains tax rate to 16% for nonresident corporations with net capital gain income.
  • Increases the alternative capital gains tax rate to 150% for foreign corporations with net capital gain income.

Who It Names or Affects

  • Nonresident individuals who earn capital gains in Hawaii.
  • Foreign individuals who earn capital gains in Hawaii.
  • Nonresident corporations that have capital gains in Hawaii.
  • Foreign corporations that have capital gains in Hawaii.

Terms To Know

Capital Gains Tax
A tax on the profit from selling an asset such as stocks or real estate.
Nonresident
Someone who does not live in a state but earns income there.

Limits and Unknowns

  • The bill only affects taxable years beginning after December 31, 2025.
  • It is unclear how this change will impact the overall tax revenue for Hawaii.

Bill History

  1. 2025-12-08 D

    Carried over to 2026 Regular Session.

  2. 2025-01-21 H

    Referred to ECD, FIN, referral sheet 1

  3. 2025-01-17 H

    Introduced and Pass First Reading.

  4. 2025-01-16 H

    Pending introduction.

Official Summary Text

RELATING TO TAXATION.
Capital Gains Tax; Income Tax; Nonresident; Foreign Taxpayers
Increases the capital gains tax for nonresident and foreign taxpayers. Increases the alternative capital gains tax for corporations for nonresident and foreign corporations.

Current Bill Text

Read the full stored bill text 
HB269

HOUSE OF REPRESENTATIVES

H.B. NO.

269

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:

����
SECTION
1
.
�
Section 235-51,
Hawaii Revised Statutes, is amended by amending subsection (f) to read as
follows:

����
"(f)
�
If a taxpayer has a net capital gain for any taxable
year to which this subsection applies, then
:

����
(1)
�
For a resident
taxpayer,
the tax imposed by this section shall not exceed the sum of:

��������
[
(1)
]

(A)
�
The tax computed at the rates and in the same
manner as if this subsection had not been enacted on the greater of:

�����������
[
(A)
]
�
(i)
�
The taxable income reduced by the amount of net
capital gain, or

�����������
[
(B)
]
�
(ii)
�
The amount of taxable income taxed at a rate below
7.25 per cent, plus

��������
[
(2)
]

(B)
�
A tax of 7.25 per cent of the amount of taxable
income in excess of the amount determined under [
paragraph (1).
]
subparagraph
(A);

����
(2)
�
For a
nonresident taxpayer, the tax imposed by this section shall not exceed the sum
of:

���������
(A)
�
The
tax computed at the rates and in the same manner as if this subsection had not
been enacted on the greater of:

�������������
(i)
�
The
taxable income reduced by the amount of net capital gain, or

������������
(ii)
�
The
amount of taxable income taxed at a rate below 29 per cent, plus

���������
(B)
�
A
tax of 29 per cent of the amount of taxable income in excess of the amount
determined under subparagraph (A); and

����
(3)
�
For a foreign
taxpayer, the tax imposed by this section shall not exceed the sum of:

���������
(A)
�
The
tax computed at the rates and in the same manner as if this subsection had not
been enacted on the greater of:

�������������
(i)
�
The
taxable income reduced by the amount of net capital gain, or

������������
(ii)
�
The
amount of taxable income taxed at a rate below 150 per cent, plus

���������
(B)
�
A
tax of 150 per cent of the amount of taxable income in excess of the amount
determined under subparagraph (A).

����
This subsection shall apply to individuals,
estates, and trusts for taxable years beginning after December 31, 1986."

����
SECTION
2
.
�
Section
235-71.5, Hawaii Revised Statutes, is amended to read as follows:

����
"
�235-71.5
�
Alternative tax for
corporations.
�
(a)
�
Section 1201 (with respect to alternative tax
for corporations) of the Internal Revenue Code of 1986, as amended as of
December 31, 1996, shall be operative for the purposes of this chapter and
shall be applied as set forth in this section.

����
(b)
�
If for any taxable year a
resident

corporation, regulated investment company, or real estate investment trust has
a net capital gain, then, in lieu of the tax imposed by section 235-71, there
is hereby imposed a tax (if such tax is less than the tax imposed under section
235-71) which shall consist of the sum of:

����
(1)
�
A tax computed on
the taxable income reduced by the amount of the net capital gain, at the rates
and in the manner as if this section had not been enacted, plus

����
(2)
�
The sum of:

���������
(A)
�
3.08 per cent of
the lesser of:

�������������
(i)
�
The net capital
gain determined by including only the gain or loss which is properly taken into
account for the portion of the taxable year before April 1, 1987 (i.e., the
amount in paragraph (1)), or

������������
(ii)
�
The net capital
gain for the taxable year, plus

���������
(B)
�
4 per cent of the
excess (if any) of:

�������������
(i)
�
The net capital
gain for the taxable year, over

������������
(ii)
�
The amount of the
net capital gain taken into account under subparagraph (A).

����
(c)
�
If for any taxable year a nonresident
corporation, regulated investment company, or real estate investment trust has
a net capital gain, then, in lieu of the tax imposed by section 235-71, there
is hereby imposed a tax (if the tax is less than the tax imposed under section
235-71) that shall consist of the sum of:

����
(1)
�
A tax computed
on the taxable income reduced by the amount of the net capital gain, at the
rates and in the manner as if this section had not been enacted, plus

����
(2)
�
The sum of:

���������
(A)
�
3.08
per cent of the lesser of:

�������������
(i)
�
The
net capital gain determined by including only the gain or loss that is properly
taken into account for the portion of the taxable year before April 1, 1987
(i.e., the amount in paragraph (1)), or

������������
(ii)
�
The
net capital gain for the taxable year, plus

���������
(B)
�
16
per cent of the excess (if any) of:

�������������
(i)
�
The
net capital gain for the taxable year, over

������������
(ii)
�
The
amount of the net capital gain taken into account under subparagraph (A).

����
(d)
�
If for any taxable year a foreign
corporation, regulated investment company, or real estate investment trust has
a net capital gain, then, in lieu of the tax imposed by section 235-71, there
is hereby imposed a tax (if the tax is less than the tax imposed under section
235-71) that shall consist of the sum of:

����
(1)
�
A tax computed
on the taxable income reduced by the amount of the net capital gain, at the
rates and in the manner as if this section had not been enacted, plus

����
(2)
�
The sum of:

���������
(A)
�
3.08
per cent of the lesser of:

�������������
(i)
�
The
net capital gain determined by including only the gain or loss that is properly
taken into account for the portion of the taxable year before April 1, 1987
(i.e., the amount in paragraph (1)), or

������������
(ii)
�
The
net capital gain for the taxable year, plus

���������
(B)
�
150
per cent of the excess (if any) of:

�������������
(i)
�
The
net capital gain for the taxable year, over

������������
(ii)
�
The
amount of the net capital gain taken into account under subparagraph (A).
"

����
SECTION 3.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION 4.
�
This Act, upon its approval, shall apply to
taxable years beginning after December 31, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Capital
Gains Tax; Income Tax; Nonresident; Foreign Taxpayers

Description:

Increases
the capital gains tax for nonresident and foreign taxpayers.
�
Increases the alternative capital gains tax
for corporations for nonresident and foreign corporations.

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