HI HB885

Requires all new income tax credits established under Hawaii law to include either a five-year sunset date or a gradual reduction mechanism beginning in year six.

Establishes a one-third annual reduction in credit amounts over a three-year period (years 6-8) as an alternative to the five-year sunset option.

Mandatory sunset or reduction provisions are designed to trigger legislative review and force determination of whether extending the tax credit is advisable or necessary.

Applies to any income tax credit established beginning January 1, 2020.

Takes effect on July 1, 2030.