HB 1146 Summary

• Establishes a carbon emissions tax on fossil fuels (petroleum products, coal, and natural gas) sold by distributors, with rates escalating from 2024 through 2036 based on carbon dioxide equivalent emissions.

• Creates a refundable income tax credit for qualified taxpayers filing Hawaii individual income tax returns, ranging from $65-$480 annually for single filers and $130-$960 for joint filers, plus $30-$240 per qualifying dependent depending on tax year (2024-2036).

• Expands the existing environmental response, energy, and food security tax to include carbon emissions, with collected revenues allocated to environmental response revolving fund, energy security special fund, energy systems development special fund, electric vehicle charging systems, hydrogen fueling systems, airport revenue fund, and boating special fund.

• Requires the Office of Planning and Sustainable Development to consult with the Department of Taxation and recommend updated tax rates and credits by December 1 of years prior to 2034, 2035, and 2036 legislative sessions.

• Applies to taxable years beginning after December 31, 2023, with effective date of June 30, 3000.