HI HB946

Establishes a carbon displacement tax credit under Hawaii income tax law for taxpayers producing locally-made goods that replace imported products.

Requires the Department of Business, Economic Development, and Tourism (DBEDT) to issue carbon displacement certificates after approving applications demonstrating that local goods are substantially similar to imports, have at least 50% value added in Hawaii, and will likely reduce import volumes.

Tax credit amount is calculated by DBEDT using a standardized formula based on greenhouse gas emissions factors for importing equivalent products, adjusted for transportation mode and supply chain variations.

Requires taxpayers to submit annual reports verifying actual sales and displacement; DBEDT may audit participants and adjust credits if actual displacement deviates significantly from projections.

Directs DBEDT to adopt rules implementing the program and submit annual legislative reports on approved taxpayers, total credits issued, estimated emissions reductions, and program improvement recommendations.