HB 1586 Summary

• Phases out county allocations of transient accommodations tax revenues over three fiscal years (FY 2017-2018 through FY 2019-2020), with excess revenues deposited into the state general fund.

• Establishes a new zero percent tax bracket for Hawaii residents earning up to $15,000-$17,500 (depending on filing status and year) and implements simplified, more progressive income tax rates over three taxable years beginning after December 31, 2017.

• Doubles the personal exemption amount from $1,144 to $2,288 for all taxpayers for taxable years beginning after December 31, 1984.

• Limits itemized tax deductions to the lesser of federal Internal Revenue Code section 68 limitations or state caps ranging from $100,000 to $200,000 depending on filing status, with an exception for charitable contributions.

• Aims to reduce tax burden on low- and middle-income Hawaii residents while shifting tax burden toward non-residents and higher-income earners.