HI HB2653

Conforms Hawaii estate tax exclusion amount to the federal applicable exclusion amount under Chapter 11 of the Internal Revenue Code, removing the previous coupling to December 31, 2017 federal law.

Establishes a new deduction for qualified family-owned business interests, allowing estates to deduct the value of closely held businesses from the gross estate if material participation requirements are met.

Requires that qualified family-owned business interests must represent at least 35% of the adjusted gross estate and have material participation by the decedent or qualified heir for at least 5 of the 8 years preceding death.

Defines "interest in a closely held business" and "material participation" by reference to sections 6166 and 2032A(e)(6) of the Internal Revenue Code of 1986, as amended.

Effective July 1, 3000 (apparent clerical error for 2025), applies to decedents dying or taxable transfers occurring after December 31, 2024.