HOUSE OF REPRESENTATIVES	H.B. NO.	232
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:

SECTION 1. The legislature finds that Hawaii has one of the highest costs of living in the nation, making it difficult for many low- and middle-income households and working families to afford basic necessities. Additionally, Native Hawaiians are disproportionally affected by poverty and other economic challenges.

The legislature further finds that the population living on Oahu's west coast, which has a significant Native Hawaiian and Pacific islander population, experiences the highest percentage of residents living below the poverty level in the city and county of Honolulu. Reducing the tax burden for these communities would provide immediate financial relief, enabling families to afford basic necessities like housing, food, transportation, and education.

The purpose of this Act is to establish a two-year pilot program that reduces the income tax liability for certain residents within the 96792 postal zip code on the island of Oahu.

SECTION 2. (a) The department of taxation shall establish a two-year pilot program that reduces the income tax liability for certain residents within the 96792 postal zip code on the island of Oahu.

(b) The reduction of income tax liability shall be as follows:

(1) If the adjusted gross income for a household is not over $          , the reduction of income tax liability shall be fifty per cent;

(2) If the adjusted gross income for a household is over $           but not over $          , the reduction of income tax liability shall be thirty per cent;

(3) If the adjusted gross income for a household is over $           but not over $          , the reduction of income tax liability shall be ten per cent; and

(4) If the taxable income for a household is over $          , the reduction of income tax liability shall be zero per cent.

(c) Individuals who are eligible to participate in the pilot program shall have continuously held a principal residence within the 96792 postal zip code area since at least January 1, 2023, and have filed a resident state income tax return for taxable years 2023 and 2024 and each taxable year the individual participates in the pilot program, unless the individual had no taxable income for any taxable year. Copies of tax filings, utility bills, leases, rental agreements, deed or title to real property, or other proof of residency, as determined by the department of taxation, shall be submitted and verified by the department prior to participation in the pilot program.

(d) The director of taxation shall prepare forms as may be necessary for taxpayers to participate in the pilot program. The director may also require the taxpayer to furnish information to verify their eligibility to participate in the pilot program and may adopt rules necessary to effectuate the purposes of this Act.

(e) The department of taxation shall submit a report on the financial impact of the pilot program, including total savings by residents, and recommendations on the pilot program, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2028.

SECTION 3. This Act shall take effect upon its approval and apply to taxable years beginning after December 31, 2024, and shall be repealed on December 31, 2026.

INTRODUCED BY:

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Report Title:

Income Tax Reduction Pilot Program; Department of Taxation

Description:

Requires the department of taxation to establish a two-year pilot program that reduces the income tax liability for certain residents within the 96792 postal zip code on the island of Oahu. Establishes eligibility and reporting requirements. Repeals 12/31/2027.

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