HB1498 Summary

• Establishes a "carbon cashback program" that imposes a carbon emissions tax on producers and importers of fossil fuels (petroleum products, coal, and natural gas) with tax rates increasing from 2024 through 2036.

• Creates a refundable income tax credit distributed to Hawaii residents filing state income tax returns, with credit amounts varying by filing status and dependent status ($65-$480 annually for single/head of household filers, $130-$960 for joint filers, plus $30-$240 per minor dependent).

• Expands the existing Environmental Response, Energy, and Food Security Tax to include carbon emissions, replacing the flat $1.05 per barrel rate with year-by-year graduated rates ranging from $3.78-$42.25 per barrel depending on fuel type and year.

• Directs tax revenue to multiple funds including environmental response ($1,116,000), energy security ($892,800), energy systems development ($1,116,000), electric vehicle charging ($669,600), hydrogen fueling ($669,600), airport operations, and boat operations, with excess revenues to general fund.

• Applies to taxable years beginning after December 31, 2023, with tax rates effective January 1 of each specified year from 2024 through 2036 and thereafter.