HI SB142

Eliminates the mortgage interest deduction for second homes under Hawaii income tax law by making certain Internal Revenue Code sections non-operative.

Makes sections 163(h)(4)(A)(i)(II) and 163(h)(4)(A)(ii)(II) of the Internal Revenue Code non-operative, which define qualified residences and treatment of deductions for married individuals filing separately.

Requires the Department of Taxation to annually calculate the state revenue gained from this change and report the amount to the Director of Finance by September 1 of each year.

Requires the Department of Budget and Finance to submit a report on administration of this Act to the legislature no later than twenty days before the convening of the 2024, 2025, 2026, and 2027 regular sessions.

Applies to taxable years beginning after December 31, 2022.