HB 1145 Summary

• Requires all new income tax credits established under Hawaii law beginning January 1, 2022 to include either a five-year sunset provision or a gradual phase-out mechanism.

• If a credit does not include a sunset date, it must include a one-third annual reduction in the allowable credit amount beginning in year six, phased over three years.

• Both mechanisms are designed to trigger mandatory legislative review and determination of whether continuing the tax credit is advisable or necessary.

• Takes effect on July 1, 2021.