HI HB1126

Increases the personal income tax exemption from $1,144 to $1,400 for taxable years beginning after December 31, 2023.

Requires the Department of Taxation to adjust the personal exemption amount biannually on June 30 (effective the following January 1) based on the percentage change in the Consumer Price Index for All Urban Consumers for Honolulu over the most recent two-year period.

Prevents the exemption amount from decreasing if the Consumer Price Index declines; the exemption remains at the most recently established amount if inflation is negative.

Applies to taxable years beginning after December 31, 2023.

First adjustment is scheduled for June 30, 2025, with subsequent adjustments every two years thereafter.