HOUSE OF REPRESENTATIVES	H.B. NO.	796
THIRTY-THIRD LEGISLATURE, 2025		H.D. 1
STATE OF HAWAII		S.D. 1

A BILL FOR AN ACT

RELATING TO TAX CREDITS.

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

SECTION 1. The purpose of this Act is to require income tax credits established or renewed after December 31, 2025, to include a five-year sunset or a gradual reduction over a three‑year period, beginning with the sixth year of the credit.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to part I to be appropriately designated and to read as follows:

"§235-    Tax credits; generally. Any income tax credit either existing under this chapter on December 31, 2025, or established or renewed under this chapter after December 31, 2025, shall include either:

(1) A five-year sunset date; or

(2) Beginning with the sixth year of the credit, an annual one-third reduction in the credit amount allowed to be claimed, over a three-year period;

provided that this section shall not apply to section 235-15 or income tax credits codified under part III of this chapter."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on July 1, 3000, and shall apply to taxable years beginning after December 31, 2025.

Report Title:

Income Tax Credits; Sunset; Annual Reduction

Description:

Requires that income tax credits existing on 12/31/2025 or established or renewed after 12/31/2025 include a 5-year sunset or an annual one-third reduction, beginning with the 6th year of the credit. Effective 7/1/3000. (SD1)

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