SB2451 • 2026

RELATING TO TAXATION.

Budget Taxes

Active

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Sponsor: RHOADS, CHANG, San Buenaventura
Last action: 2026-02-19
Official status: Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM.
Effective date: Not listed

Plain English Breakdown

Using official source text because the generated explanation was unavailable or could not be confirmed against the official bill text.

RELATING TO TAXATION.

What This Bill Does

RELATING TO TAXATION.
Department of Budget and Finance; Department of Taxation; Home Mortgage Interest Deduction; Income Tax; Reports Eliminates the home mortgage interest deduction for second homes not used as a primary residence under Hawaii income tax law.
Requires reports to the Legislature.
Effective 7/1/2050.

Limits and Unknowns

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Amendments

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SD1

Hawaii published version SD1

Plain English: SB2451 SD1 THE SENATE S.B.

SB2451 SD1 THE SENATE S.B.
NO.
2451 THIRTY-THIRD LEGISLATURE, 2026 S.D.
1 STATE OF HAWAII A BILL FOR AN ACT RELATING TO TAXATION .

Bill History

2026-02-19 S
Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM.
2026-02-19 S
Reported from HOU (Stand. Com. Rep. No. 2401) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM.
2026-02-10 S
The committee(s) on HOU recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in HOU were as follows: 5 Aye(s): Senator(s) Chang, Hashimoto, Elefante, Rhoads, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none.
2026-02-05 S
The committee(s) on HOU deferred the measure until 02-10-26 1:00PM; Conference Room 225 & Videoconference.
2026-02-02 S
The committee(s) on HOU has scheduled a public hearing on 02-05-26 1:01PM; Conference Room 225 & Videoconference.
2026-01-28 S
Referred to HOU, WAM.
2026-01-22 S
Passed First Reading.
2026-01-22 S
Introduced.

Official Summary Text

RELATING TO TAXATION.
Department of Budget and Finance; Department of Taxation; Home Mortgage Interest Deduction; Income Tax; Reports
Eliminates the home mortgage interest deduction for second homes not used as a primary residence under Hawaii income tax law. Requires reports to the Legislature. Effective 7/1/2050. (SD1)

Current Bill Text

Read the full stored bill text

SB2451

THE SENATE

S.B. NO.

2451

THIRTY-THIRD LEGISLATURE, 2026

STATE OF HAWAII

A BILL FOR AN ACT

relating
to taxation
.

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

����
SECTION 1.
�
The purpose of this Act is to eliminate the
home mortgage interest deduction for second homes under Hawaii income tax law.

����
SECTION

2
.
�
Section
235-2.4, Hawaii Revised Statutes, is amended by amending subsection (j) to read
as follows:

����
"(j)
�
Section 163 (with respect to interest) of the
Internal Revenue Code shall be operative for the purposes of this chapter,
except that the following provisions shall not be operative for the purposes of
this chapter:

����
(1)
�
Section 163(d)(4)(B) (defining net
investment income to exclude dividends);

����
(2)
�
Section 163(e)(5)(F) (suspension of
applicable high‑yield discount obligation (AHYDO) rules);

����
(3)
�
Section 163(h)(3)(F) (limiting mortgage
interest); [
and
]

����
(4)
�
Section 163(h)(4)(A)(i)(II)
(definition of qualified residence for home mortgage interest deduction);

����
(5)
�
Section 163(h)(4)(A)(ii)(II)
(treatment of home mortgage interest deduction for married individuals filing
separately); and

���
[
(4)
]

(6)
�
Section 163(i)(1) as it applies to
debt instruments issued after January 1, 2010 (defining AHYDO)."

����
SECTION 3.
�
The department of budget and finance, in consultation
with the department of taxation, shall submit a report on the administration of
this Act to the legislature no later than twenty days prior to the convening of
the regular sessions of 2027, 2028, 2029, 2030, and 2031.

����
SECTION
4.
�
Statutory material to be repealed is
bracketed and stricken.
�
New statutory
material is underscored.

����
SECTION
5.
�
This Act, upon its approval, shall
apply to taxable years beginning after December 31, 2025.

INTRODUCED BY:

_____________________________

Report Title:

Department
of Budget and Finance; Department of Taxation; Home Mortgage Interest
Deduction; Income Tax; Reports

Description:

Eliminates
the home mortgage interest deduction for second homes under Hawaii income tax
law.
�
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.