HB916 • 2026

RELATING TO THE LOW-INCOME HOUSING TAX CREDIT.

Housing Taxes

Active

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

Sponsor: HASHEM
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 bill's effective date and application start year are different from what was initially stated in the candidate explanation.

Low-Income Housing Tax Credit Changes

This bill allows developers to use state low-income housing tax credits to reduce their transient accommodations taxes, but the changes will apply to taxable years starting after December 31, 2027.

What This Bill Does

Allows the state low-income housing tax credit to be used for reducing transient accommodations taxes.
Limits the amount of tax credit that can offset transient accommodations taxes to those in the same county as the qualified low-income building.

Who It Names or Affects

Housing developers who build or manage low-income housing projects.
Hotels and similar businesses that pay transient accommodations taxes.

Terms To Know

Low-Income Housing Tax Credit: A tax credit given to developers for building affordable housing, which can now be used to offset other types of taxes.
Transient Accommodations Tax: A tax paid by hotels and similar businesses that rent accommodations to visitors or temporary guests.

Limits and Unknowns

The changes will only apply to taxable years starting after December 31, 2027.
It is unclear how many developers will take advantage of this new option for tax credits.

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 the state low-income housing tax credit to be used to offset transient accommodations taxes, increasing investment in affordable housing projects.

The state low-income housing tax credit can now be applied to reduce transient accommodations tax liability.
Act 129 of 2016 is made permanent.

The amendment specifies that the tax credits for transient accommodations taxes are limited to those imposed in the same county where the low-income building is located.

SD1

Hawaii published version SD1

Plain English: This amendment allows developers of low-income housing projects in Hawaii to use their state low-income housing tax credits to offset transient accommodations taxes, making it easier for them to raise funds and construct affordable housing.

Allows the state low-income housing tax credit to be used against transient accommodations taxes.
Clarifies that the tax credit can be carried over to future years if not fully used in the current year.

The amendment text is truncated and does not provide full details, so some specifics are unclear.

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 HOU/EDT (Stand. Com. Rep. No. 3280) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM.
2026-03-24 S
The committee(s) on EDT recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in EDT were as follows: 4 Aye(s): Senator(s) DeCoite, Wakai; Aye(s) with reservations: Senator(s) Kim, Fevella ; 0 No(es): none; and 1 Excused: Senator(s) Fukunaga.
2026-03-24 S
The committee(s) on HOU recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in HOU were as follows: 4 Aye(s): Senator(s) Chang, Hashimoto, Rhoads; Aye(s) with reservations: Senator(s) Fevella ; 0 No(es): none; and 1 Excused: Senator(s) Elefante.
2026-03-17 S
The committee(s) on HOU/EDT has scheduled a public hearing on 03-24-26 1:00PM; Conference Room 229 & Videoconference.
2026-03-10 S
Referred to HOU/EDT, WAM.
2026-03-06 S
Passed First Reading.
2026-03-06 S
Received from House (Hse. Com. No. 10).
2026-03-05 H
Passed Third Reading with Representative(s) Garcia, Muraoka voting aye with reservations; Representative(s) Iwamoto voting no (1) and Representative(s) Perruso excused (1). Transmitted to Senate.
2026-03-05 H
Reported from FIN (Stand. Com. Rep. No. 866-26), recommending passage on Third Reading.
2026-03-02 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, Gedeon, Reyes Oda; Ayes with reservations: none; Noes: none; and 1 Excused: Representative(s) Alcos.
2026-02-27 H
Bill scheduled for decision making on Monday, 03-02-26 10:00AM in conference room 308 VIA VIDEOCONFERENCE.
2026-02-27 H
The committee(s) on FIN recommend(s) that the measure be deferred until 03-02-26.
2026-02-24 H
Bill scheduled to be heard by FIN on Friday, 02-27-26 2:00PM in House conference room 308 VIA VIDEOCONFERENCE.
2026-02-20 H
Report adopted; referred to the committee(s) on FIN with Representative(s) Garcia, Muraoka voting aye with reservations; none voting no (0) and Representative(s) Quinlan excused (1).
2026-02-20 H
Reported from TOU/ECD (Stand. Com. Rep. No. 727-26), recommending referral to FIN.
2026-02-19 H
The committee on ECD recommend that the measure be PASSED, UNAMENDED. The votes were as follows: 5 Ayes: Representative(s) Ilagan, Tam, Templo, Yamashita, Gedeon; Ayes with reservations: none; Noes: none; and 1 Excused: Representative(s) Hussey.
2026-02-19 H
The committee on TOU recommend that the measure be PASSED, UNAMENDED. The votes were as follows: 5 Ayes: Representative(s) Tam, Templo, Ilagan, Yamashita, Gedeon; Ayes with reservations: none; Noes: none; and 1 Excused: Representative(s) Hussey.
2026-02-13 H
Bill scheduled for decision making on Thursday, 02-19-26 9:30AM in conference room 423 VIA VIDEOCONFERENCE.
2025-12-08 D
Carried over to 2026 Regular Session.
2025-02-11 H
The committee(s) on TOU/ECD recommend(s) that the measure be deferred.
2025-02-07 H
Bill scheduled to be heard by TOU/ECD on Tuesday, 02-11-25 10:30AM 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 TOU/ECD with Representative(s) Garcia voting aye with reservations; none voting no (0) and Representative(s) Cochran, Kong, Ward excused (3).
2025-02-04 H
Reported from HSG (Stand. Com. Rep. No. 139) as amended in HD 1, recommending passage on Second Reading and referral to TOU/ECD.
2025-01-29 H
The committee on HSG recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 8 Ayes: Representative(s) Evslin, Miyake, Grandinetti, Kila, Kitagawa, La Chica, Pierick; Ayes with reservations: Representative(s) Muraoka; Noes: none; and 1 Excused: Representative(s) Cochran.
2025-01-27 H
Bill scheduled to be heard by HSG on Wednesday, 01-29-25 9:15AM in House conference room 430 VIA VIDEOCONFERENCE.
2025-01-23 H
Referred to HSG, TOU/ECD, FIN, referral sheet 3
2025-01-23 H
Introduced and Pass First Reading.
2025-01-21 H
Pending introduction.

Official Summary Text

RELATING TO THE LOW-INCOME HOUSING TAX CREDIT.
Low-Income Housing Tax Credit; Affordable Housing; Transient Accommodations Tax
Allows tax credits claimed under the State Low-Income Housing Tax Credit Program to be used to offset taxes imposed by the state transient accommodations tax law. Specifies that tax credit amounts applied to state transient accommodations taxes be limited to state transient accommodations taxes imposed in the same county in which the qualified low-income building is located. Makes permanent Act 129, SLH 2016. Applies to taxable years beginning after 12/31/2027. Effective 7/1/3000. (SD1)

Current Bill Text

Read the full stored bill text

HB916

HOUSE OF REPRESENTATIVES

H.B. NO.

916

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

relating
to the low-income housing tax credit
.

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

����
SECTION
1.
�
The legislature finds that the
low-income housing credit is a federal tax credit under Section 42 of the
Internal Revenue Code that is intended to increase the construction of low-income
housing by awarding tax credits to housing developers who agree to reserve a portion
of their housing developments for lower‑income households.

����
The
legislature further finds that Hawaii also has a state low-income housing tax
credit, based on the federal low-income housing credit requirements.
�
However, unlike the federal tax credit, section
235-110.8(b), Hawaii Revised Statutes, allows any partner or member of the housing
developer to claim any portion of that housing developer's state tax credit, including
partners and members who are not eligible for the corresponding federal tax
credit.
�
This mechanism expands the
potential pool of investors and enhances opportunities for affordable housing
developers to raise the equity necessary to finance their projects.
�
However, the state low-income housing tax
credit may only be claimed against income tax, the taxes imposed under chapter
235, Hawaii Revised Statutes.

����
The
legislature also finds that the transient accommodations tax under chapter
237D, Hawaii Revised Statutes, is a tax imposed on hotels and similar entities
that rent accommodations to transient persons.
�

The state low-income housing tax credit cannot be used to offset
transient accommodations taxes.

����
Accordingly,
the purpose of this Act is to facilitate the construction of low-income housing
by allowing the state low‑income housing tax credit to be used to offset
transient accommodations tax liability, which will increase the pool of
investors for low-income housing projects.

����
SECTION
2
.
�
Section 235-110.8, Hawaii Revised Statutes,
is amended by amending subsection (i) to read as follows:

����
"(i)
�
The credit allowed under this section shall
be claimed against net income
or other
tax liability for the taxable
year.
�
For the purpose of deducting this
tax credit, [
net income tax liability
]
"net income or other tax
liability"
means net income tax liability reduced by all other credits
allowed the taxpayer under this chapter[
.
]
and any tax liability
assessed pursuant to chapter 237D
in the county in
which the
�
qualified low-income building
is located.

����
A tax credit under this section that
exceeds the taxpayer's income
or applicable transient accommodations
tax
liability may be used as a credit against the taxpayer's income
or applicable
transient accommodations
tax liability in subsequent years until
exhausted.
�
All claims for a tax credit
under this section shall be filed on or before the end of the twelfth month
following the close of the taxable year for which the credit may be claimed and
shall include a copy of Form 8609 issued by the corporation with respect to the
building; provided that with respect to the first year that the credit is
claimed for a qualified low-income housing project, if the taxpayer has not yet
received the Form 8609 prior to the time the taxpayer files its original tax
return claiming the credit under this section, the taxpayer may claim the
credit based upon the amount of credit set forth in the carryover allocation or
42(m) letter, as applicable, issued to the qualified low-income housing
project, and upon receipt of the Form 8609, the taxpayer shall:

����
(1)
�
Amend its tax return to include the Form 8609;
and

����
(2)
�
If the credit amount in the Form 8609 is
different than the amount of credit previously claimed, adjust the credit
amount claimed on its amended return.

Failure to properly and timely claim the credit
shall constitute a waiver of the right to claim the credit.
�
A taxpayer may claim a credit under this
section only if the building or project is a qualified low-income housing
building or a qualified low-income housing project under section 42 of the
Internal Revenue Code.

����
Except as provided under subsection
(j)(1), section 469 (with respect to passive activity losses and credits
limited) of the Internal Revenue Code shall be applied in claiming the credit
under this section."

����
SECTION
3.
�
Act 129, Session Laws of Hawaii 2016,
as amended by Act 226, Session Laws of Hawaii 2021, is amended by amending
section 4 to read as follows:

����
"SECTION
4.
�
This Act, upon its approval, shall
take effect on January 1, 2017, and shall apply to qualified low-income
buildings awarded credits after December 31, 2016[
; provided that this Act
shall be repealed on December 31, 2027, and section 235-110.8, Hawaii Revised
Statutes, shall be reenacted in the form in which it read on the day prior to
the effective date of this Act
]."

����
SECTION
4.
�
Act 226, Session Laws of Hawaii 2021,
is amended by amending section 4 to read as follows:

����
"SECTION
4.
�
This Act shall take effect on July 1,
2021, and shall apply to taxable years beginning after December 31, 2020[
;
provided that the amendments made to section 235-110.8, Hawaii Revised
Statutes, by section 1 of this Act shall not be repealed when that section is
reenacted on December 31, 2027, pursuant to section 4 of Act 129, Session Laws
of Hawaii 2016, and section 2 of this Act
]."

����
SECTION
5.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION 6.
�
This Act shall take effect upon its approval;
provided that section 2 shall apply to taxable years beginning after December
31, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Low-Income
Housing Tax Credit; Affordable Housing; Transient Accommodations Tax

Description:

Allows
tax credits claimed under the state low-income housing tax credit program to be
used to offset taxes imposed by the state transient accommodations tax law.
�
Specifies that tax credit amounts applied to
state transient accommodations taxes be limited to state transient
accommodations taxes imposed in the same county in which the qualified low-income
building is located.

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not legislation or evidence of legislative intent.