REQUESTING THE DEPARTMENT OF BUSINESS, ECONOMIC DEVELOPMENT, AND TOURISM TO CONDUCT A STUDY ON THE EFFECT OF STATE AND COUNTY TAX STRUCTURES AND PROGRAMS ON THE LONG-TERM ECONOMIC GROWTH OF THE STATE OF HAWAII.

HR60

HOUSE OF REPRESENTATIVES

H.R. NO.

60

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

HOUSE RESOLUTION

REQUESTING THE DEPARTMENT OF BUSINESS, ECONOMIC
DEVELOPMENT, AND TOURISM TO CONDUCT A STUDY ON THE EFFECT OF STATE AND COUNTY
TAX STRUCTURES AND PROGRAMS ON THE LONG-TERM ECONOMIC GROWTH OF THE STATE OF
HAWAII
.

����
WHEREAS, while
Act 142, Session Laws of Hawaii, 2024, states that new business formations have
grown by thirty-seven percent in Hawaii since the beginning of 2020, this is
well below the national average and among the bottom ten states nationally; and

����
WHEREAS, in
the latest comprehensive entrepreneurial study from the Kauffman Foundation, Hawaii's
early survival rate for startups is the lowest in the country; and

����
WHEREAS, self-employment
rates in Hawaii have consistently been lower than in the rest of the United
States and, in 2020, Hawaii ranked fortieth for the State's percentage of self‑employed
individuals; and

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WHEREAS, the state
and county tax structures are factors in business investment decisions and
often affect the movement of individuals both within, and to and from, the
State; and

����
WHEREAS, reports
show that generally both companies and individuals are more likely to move to locations
that have lower taxes; and

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WHEREAS, Hawaii
recently ranked sixth-highest in the country for state and local taxes per
capita and was ranked forty-second for business climate by the Tax Foundation;
and

����
WHEREAS, Article
VIII, section 3, of the Hawaii State Constitution states that "[t]he
taxing power shall be reserved to the State, except so much thereof as may be
delegated by the legislature to the political subdivisions, and except that all
functions, powers and duties relating to the taxation of real property shall be
exercised exclusively by the counties, with the exception of the county of
Kalawao. The legislature shall have the power to apportion state revenues among
the several political subdivisions[;]" and

����
WHEREAS, Article
VIII, section 5, of the Hawaii State Constitution states that "[i]f any
new program or increase in the level of service under an existing program shall
be mandated to any of the political subdivisions by the legislature, it shall
provide that the State share in the cost[;]" and

����
WHEREAS, the
growth of the state economy requires a comprehensive examination and evaluation
of Hawaii's state and county tax structures to determine how new and existing state
and county programs can be most equitably and efficiently paid for; now,
therefore,

����
BE IT
RESOLVED by the House of Representatives of the Thirty-third Legislature of the
State of Hawaii, Regular Session of 2026, that the Department of Business,
Economic Development, and Tourism is requested to conduct a comprehensive study
of Hawaii's state and county tax structures to determine how new and existing state
and county programs can be most equitably and efficiently paid for in order to
foster the long-term growth of the State's economy; and

����
BE IT FURTHER
RESOLVED that the Department of Business, Economic Development, and Tourism is
requested to consider in the study a comprehensive cost of doing business
analysis, factoring in Hawaii's high operational costs, including taxes,
energy, labor, and imported inputs; and

����
BE IT FURTHER
RESOLVED that the Department of Business, Economic Development, and Tourism, in
conjunction with the Economic Research Organization at the University of Hawaii,
is requested to make policy recommendations on how the State can realign and
prioritize existing state and county tax structures with existing state and
county programs to better promote the long-term economic growth of the State;
and

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BE IT FURTHER
RESOLVED that certified copies of this Resolution be transmitted to the
Director of Business, Economic Development, and Tourism; Director of Taxation;
Chairperson of the Tax Review Commission; Mayor of each county; and Executive
Director of the Economic Research Organization at the University of Hawaii.

OFFERED BY:

_____________________________

Report Title:
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DBEDT;
DOTAX; Tax Review Commission; Counties; UHERO; Study; State and County Tax
Structures; State and County Programs; Long-Term Economic Growth