RELATING TO TAXATION.

Labor Taxes

Active

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

Sponsor: HOLT, GARCIA, LAMOSAO, MARTEN, Muraoka
Last action: 2025-12-08
Official status: Carried over to 2026 Regular Session.
Effective date: Not listed

Plain English Breakdown

The effective date of July 1, 3000 is likely a placeholder or error and should be clarified.

Tax Credit for Businesses Paying Employee Public Transportation Costs

This bill allows businesses to get a tax credit if they pay for their employees' public transportation costs in counties with populations over 700,000.

What This Bill Does

Creates a new tax credit for businesses that cover the cost of public transportation for their employees.
Limits this tax credit to businesses located in counties with at least 700,000 residents.
Requires businesses to file claims for the tax credit within one year after the end of the taxable year.
Asks the director of taxation to report on the use and impact of the tax credit every year from 2027 to 2030.

Who It Names or Affects

Businesses that pay for their employees' public transportation costs in large counties (over 700,000 people).
Employees who use public transportation and have employers who cover the cost.
The state government, which will need to track and report on this tax credit.

Terms To Know

Tax Credit: A reduction in the amount of taxes a business or individual has to pay.
Public Transportation: Transportation services like buses, trains, and subways that are open to everyone and run by the government or local authorities.

Limits and Unknowns

The tax credit is only available for taxable years starting after December 31, 2024, but not after December 31, 2029.
It's unclear how many businesses will take advantage of this tax credit.

Amendments

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

HD1

Hawaii published version HD1

Plain English: This amendment allows businesses to claim a tax credit for paying public transportation costs for their employees, with certain conditions and reporting requirements.

Businesses can now claim a tax credit on their income taxes if they pay for public transportation expenses for their employees.
The tax credit is available only for taxable years starting after December 31, 2025, but not after December 31, 2029.
Employers must file claims for the tax credit within one year of the end of the taxable year.

The amendment text does not specify how much of a tax credit businesses can claim or what qualifies as public transportation expenses.

HD2

Hawaii published version HD2

Plain English: This amendment allows businesses to claim a tax credit for paying public transportation costs for their employees, with certain conditions and reporting requirements.

Businesses can now claim a tax credit on their income taxes if they pay for public transportation expenses for their employees.
The tax credit is limited to taxable years starting after December 31, 2025, but not after December 31, 2029.
Businesses must file claims for the tax credit within one year of the end of the taxable year.

The exact percentage of expenses that qualify for the tax credit is not specified in the provided text.
Details on how to calculate and claim the tax credit are left to future regulations by the director of taxation.

Bill History

2025-12-08 D
Carried over to 2026 Regular Session.
2025-02-12 H
Report adopted; referred to the committee(s) on FIN as amended in HD 2 with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Sayama, Ward excused (3).
2025-02-12 H
Reported from ECD (Stand. Com. Rep. No. 499) as amended in HD 2, recommending referral to FIN.
2025-02-07 H
The committee on ECD recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 7 Ayes: Representative(s) Ilagan, Hussey, Holt, Tam, Templo, Todd, Matsumoto; Ayes with reservations: none; 0 Noes: none; and 0 Excused: none.
2025-02-04 H
Bill scheduled to be heard by ECD on Friday, 02-07-25 10:15AM in House conference room 423 VIA VIDEOCONFERENCE.
2025-02-04 H
Passed Second Reading as amended in HD 1 and referred to the committee(s) on ECD with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Kong, Ward excused (3).
2025-02-04 H
Reported from TRN (Stand. Com. Rep. No. 76) as amended in HD 1, recommending passage on Second Reading and referral to ECD.
2025-01-28 H
The committee on TRN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 8 Ayes: Representative(s) Kila, Grandinetti, Evslin, Kitagawa, La Chica, Miyake, Muraoka, Pierick; Ayes with reservations: none; 0 Noes: none; and 1 Excused: Representative(s) Cochran.
2025-01-24 H
Bill scheduled to be heard by TRN on Tuesday, 01-28-25 10:00AM in House conference room 430 VIA VIDEOCONFERENCE.
2025-01-21 H
Referred to TRN, ECD, FIN, referral sheet 2
2025-01-21 H
Introduced and Pass First Reading.
2025-01-17 H
Pending introduction.

Official Summary Text

RELATING TO TAXATION.
Tax Credit; Businesses; Employees; Public Transportation; Legislature; Reports
Authorizes a tax credit for businesses that pay the public transportation costs of employees. Requires reports to the Legislature. Applies for taxable years beginning after 12/31/2025 but not beginning after 12/31/2029. Effective 7/1/3000. (HD2)

Current Bill Text

Read the full stored bill text

HB577

HOUSE OF REPRESENTATIVES

H.B. NO.

577

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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Chapter 235,
Hawaii Revised Statutes, is amended by adding a new section to be appropriately
designated and to read as follows:

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"
�235-
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Public
transportation subsidization tax credit.
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(a)
�

There shall be allowed to each individual or corporate taxpayer who is
not claimed, or is not otherwise eligible to be claimed, as a dependent by
another taxpayer for federal or state income tax purposes, a public
transportation subsidization tax credit that shall be deductible from the
taxpayer's net income tax liability imposed by this chapter for the taxable
year in which the tax credit is properly claimed.

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(b)
�

To qualify for the tax credit, the taxpayer shall be an employer having
a place of business in any county in the State having a population of seven
hundred thousand or more.

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(c)
�

The amount of the tax credit shall be equal to the amount spent by the
taxpayer during the taxable year to purchase fares or passes for the employer's
employees to use public transportation.

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(d)
�

If the tax credit under this section exceeds the taxpayer's income tax
liability, the excess of the credit over liability may be used as a credit
against the taxpayer's income tax liability in subsequent years until
exhausted.

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All claims for the tax credit under this
section, including amended claims, shall be filed on or before the end of the
twelfth month following the close of the taxable year for which the tax credit
may be claimed.
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Failure to meet the
filing requirements of this subsection shall constitute a waiver of the right
to claim the tax credit.

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(e)
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The director of taxation:

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(1)
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Shall
prepare any forms that may be necessary to claim a tax credit under this
section;

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(2)
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May
require the taxpayer to furnish reasonable information to ascertain the
validity of the claim for the tax credit made under this section; and

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(3)
�
May
adopt rules under chapter 91 necessary to effectuate the purposes of this
section.

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(f)
�

The tax credit authorized under this section shall not be available for
taxable years beginning after December 31, 2029.

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(g)
�

The director of taxation shall submit to the legislature reports
regarding the tax credit authorized under this section.
�
Each report shall be submitted twenty days
prior to the convening of the 2027, 2028, 2029, and 2030 regular sessions.
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Each report shall include, at minimum:

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(1)
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The
number and value of the credits granted under this section for the prior
calendar year;

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(2)
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The
total number and value of the credits granted under this section since the
enactment of this section;

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(3)
�
The
impact of the tax credit authorized under this section; and

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(4)
�
A
recommendation whether the State should continue to authorize the tax credit
under this section.

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(h)
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For the purposes of this section, "public transportation"
means any mass transportation program that is:

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(1)
�
Open
to the general public;

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(2)
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Operated
or contracted by the State or a county; and

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(3)
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Operated
within a county having a population of seven hundred thousand or more.
"

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SECTION 2.
�

New statutory material is underscored.

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SECTION 3.
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This Act, upon its approval, shall apply to taxable years beginning
after December 31,
2024.

INTRODUCED BY:

_____________________________

Report Title:

Tax
Credit; Businesses; Employees; Public Transportation; Legislature; Reports

Description:

Authorizes
a tax credit for businesses that pay the public transportation costs of
employees.
�
Applies to counties having
populations of 700,000 or more.
�
Applies for
taxable years beginning after 12/31/2024 but not beginning after
12/31/2029.
�
Requires reports to the Legislature.

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