HI HB234

Disallows the dividends paid deduction for real estate investment trusts (REITs) for taxable years beginning after December 31, 2023, and ending before January 1, 2027.

Requires REITs to pay Hawaii state income tax on their full taxable income without deducting dividends paid to shareholders during the three-year period.

Directs 50% of revenues collected from the disallowance to the dwelling unit revolving fund and 50% to the rental housing revolving fund.

Adds Section 857(b)(2)(B) of the Internal Revenue Code to Hawaii's list of provisions that do not apply for state tax purposes.

Sunsets December 31, 2026, and restores prior REIT tax treatment retroactively unless reenacted.