RELATING TO THE FILM INDUSTRY.

SB732

THE SENATE

S.B. NO.

732

THIRTY-THIRD LEGISLATURE, 2025

STATE OF HAWAII

A BILL FOR AN ACT

RELATING
TO THE FILM INDUSTRY
.

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

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SECTION
1
.
�
Section 235-17, Hawaii Revised Statutes, is
amended as follows:

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1.
��
By
amending subsection (h) to read:

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"
(h)
�
Every taxpayer claiming a tax credit under
this section for a qualified production shall, no later than ninety days
following the end of each taxable year in which qualified production costs were
expended, submit a written, sworn statement to the department of business,
economic development, and tourism that identifies:

����
(1)
�
All qualified production costs as
provided by subsection (a), if any, incurred in the previous taxable year;

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(2)
�
The amount of tax credits claimed
pursuant to this section, if any, in the previous taxable year; and

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(3)
�
The number of total hires versus the
number of local hires by category and by county.

If
the
qualified production
costs of a
taxpayer
exceed $1,000,000
in
a
taxable year
, the written, sworn statement shall be accompanied
by an independent third-party certificate, issued by a qualified certified
public accountant, that verifies all representations made for the purpose of
claiming the credit under this section.
�

The certificate shall be prepared and submitted
in accordance with
standards and procedures prescribed by the
department of business, economic development, and tourism and the department of
taxation.
�
This information may be
reported from the department of business, economic development, and tourism to
the legislature pursuant to subsection (i)(4)."

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2.
��
By amending subsections (n) and (o) to read:

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"(n)
�
The total amount of tax credits allowed under
this section in any particular year shall be [
$50,000,000;
]
$60,000,000;

however, if the total amount of credits applied for in any particular year
exceeds the aggregate amount of credits allowed for that year under this
section, the excess shall be treated as having been applied for in the
subsequent year and shall be claimed in the subsequent year; provided that no
excess shall be allowed to be claimed after December 31, [
2032.
]
2038.

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(o)
�
For the purposes of this section:

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"Commercial":

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(1)
�
Means an advertising message that is
filmed using film, videotape, or digital media, for dissemination via
television broadcast or theatrical distribution;

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(2)
�
Includes a series of advertising
messages if all parts are produced at the same time over the course of six
consecutive weeks; and

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(3)
�
Does not include an advertising message
with Internet‑only distribution.

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"Digital
media" means production methods and platforms directly related to the
creation of cinematic imagery and content, specifically using digital means,
including but not limited to digital cameras, digital sound equipment, and
computers, to be delivered via film, videotape, interactive game platform, or
other digital distribution media.

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"Post-production"
means production activities and services conducted after principal photography
is completed, including but not limited to editing, film and video transfers,
duplication, transcoding, dubbing, subtitling, credits, closed captioning,
audio production, special effects (visual and sound), graphics, and animation.

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"Production"
means a series of activities that are directly related to the creation of
visual and cinematic imagery to be delivered via film, videotape, or digital
media and to be sold, distributed, or displayed as entertainment or the
advertisement of products for mass public consumption, including but not
limited to scripting, casting, set design and construction, transportation,
videography, photography, sound recording, interactive game design, and
post-production.

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"Qualified
production":

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(1)
�
Means a production, with expenditures
in the State, for the total or partial production of a feature-length motion
picture, short film, made-for-television movie, commercial, music video,
interactive game, television
(including broadcast and streaming platforms)

series pilot, single season (up to twenty‑two episodes[
)
]
for
broadcast television; and up to eight episodes for an ongoing series for
streaming platforms)
of a [
television
] series [
regularly
]
filmed in the State [
(if
]
.
�
If

the number of episodes per single season
for a broadcast series
exceeds
twenty-two,
and if a streaming series exceeds eight,
additional episodes
for the same season shall constitute a separate qualified production[
),
]
.

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"Qualified production" also
includes a
television
or streaming platform
special, single [
television
]
episode that is not part of a television
or streaming platform
series
regularly filmed or based in the State, national magazine show, [
or
]
and

national talk show.
�
For the purposes of
subsections (d) and (l), each of the aforementioned qualified production
categories shall constitute separate, individual qualified productions; and

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(2)
�
Does not include:

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(A)
�
News;

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(B)
�
Public affairs programs;

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(C)
�
Non-national magazine or talk shows;

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(D)
�
Televised sporting events or
activities;

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(E)
�
Productions that solicit funds;

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(F)
�
Productions produced primarily for
industrial, corporate, institutional, or other private purposes; and

���������
(G)
�
Productions that include any material
or performance prohibited by chapter 712.

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"Qualified
production costs" means the costs incurred by a qualified production
within the State that are subject to the general excise tax under chapter 237
at the highest rate of tax or income tax under this chapter if the costs are
not subject to general excise tax and that have not been financed by any
investments for which a credit was or will be claimed pursuant to section
235-110.9.
�
"
Qualified
production costs
"
[
include
]
includes
but [
are
]

is
not limited to:

����
(1)
�
Costs incurred during preproduction
such as location scouting and related services;

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(2)
�
Costs of set construction and
operations, purchases or rentals of wardrobe, props, accessories, food, office
supplies, transportation, equipment, and related services;

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(3)
�
Wages or salaries of cast, crew, and
musicians;

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(4)
�
Costs of photography, sound
synchronization, lighting, and related services;

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(5)
�
Costs of editing, visual effects,
music, other post-production, and related services;

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(6)
�
Rentals and fees for use of local
facilities and locations, including rentals and fees for use of state and
county facilities and locations that are not subject to general excise tax
under chapter 237 or income tax under this chapter;

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(7)
�
Rentals of vehicles and lodging for
cast and crew;

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(8)
�
Airfare for flights to or from Hawaii,
and interisland flights;

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(9)
�
Insurance and bonding;

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(10)
�
Shipping of equipment and supplies to
or from Hawaii, and interisland shipments; and

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(11)
�
Other direct production costs specified
by the department in consultation with the department of business, economic
development, and tourism;

provided
that any government-imposed fines, penalties, or interest that are incurred by
a qualified production within the State shall not be "qualified production
costs".
�
"
Qualified production costs
"
[
does
]
do
not include any costs
funded by any grant, forgivable loan, or other amounts not included in gross
income for purposes of this chapter.

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"
Streaming
platform
"
means
an online provider of
media content
that
delivers the content via
internet
connection
to the subscriber's computer,
television
, or

mobile device
through a paid
subscription
.
"

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SECTION 2.
�

Act 88, Session Laws of Hawaii 2006,
as amended by section 3 of Act 89, Session
Laws of Hawaii 2013, as amended by section 3 of Act 143, Session Laws of Hawaii
2017, as amended by section 4 of Act 217, Session Laws of Hawaii 2022
is
amended by amending section 4 to read as follows:

����
"SECTION 4.
�
This Act shall take effect on July 1, 2006;
provided that:

����
(1)
�
Section
2 of this Act shall apply to qualified production costs incurred on or after
July 1, 2006, and before January 1, [
2033;
]
2039;
and

����
(2)
�
This
Act shall be repealed on January 1, [
2033,
]
2039,
and section
235-17, Hawaii Revised Statutes, shall be reenacted in the form in which it
read on the day before the effective date of this Act."

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SECTION 3.
�

Act 143, Session Laws of Hawaii 2017, is amended by amending section 6
to read as follows:

����
"SECTION 6.
�
[
No later than January 1, 2018, and each
January 1 thereafter, each film production that has production expenditures of
$1,000,000 or more and is claiming a tax credit pursuant to section 235-17,
Hawaii Revised Statutes, shall obtain an independent third party certification
of qualified production costs eligible for the motion picture, digital media,
and film production income tax credit in the form of a tax opinion, as required
under section 235-17(h), Hawaii Revised Statutes, submitted to the department
of business, economic development, and tourism.
]
Repealed.
"

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SECTION 4.
�

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

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SECTION 5.
�

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

INTRODUCED BY:

_____________________________

Report Title:

Motion Picture,
Digital Media, and Film Production Income Tax Credit; Broadcast and Streaming
Platforms

Description:

Requires qualified production costs of a taxpayer that
exceed $1,000,000 to be certified by an independent third-party certified
public accountant to qualify for the tax credit.
�
Increases the total amount of tax credits
allowed in any given year from $50,000,000 to $60,000,000.
�
Includes broadcast and streaming platform
productions under the tax credit.
�

Defines "streaming platform".
�

Extends the sunset date for the tax credit to 1/1/2039.
�
Makes conforming amendments.

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