HB1498 Summary

• Establishes a carbon cashback program that imposes a carbon emissions tax on fossil fuels (petroleum products, coal, and natural gas) sold by distributors, with tax rates increasing annually from 2024 through 2036.

• Creates a refundable income tax credit for Hawaii residents filing individual income tax returns, with credit amounts ranging from $65-$480 per taxpayer in 2024-2036 depending on filing status, plus $30-$240 per qualifying minor dependent.

• Modifies the existing environmental response, energy, and food security tax to add carbon emissions pricing, with specific per-barrel rates for petroleum products and per-MMBtu rates for coal and natural gas varying by fuel type and year.

• Allocates tax revenues to specific funds including the environmental response revolving fund, energy security special fund, energy systems development special fund, electric vehicle charging system subaccount, hydrogen fueling system subaccount, airport revenue fund, and boating special fund.

• Applies to taxable years beginning after December 31, 2023, and takes effect upon approval.