SB 125 Summary

• Expands "eligible business activity" for Hawaii's enterprise zone program to include retail sales of manufactured goods, value-added agricultural products, health care professional services, advanced manufacturing, and cybersecurity technology development.

• Extends the tax credit eligibility period for qualified businesses in enterprise zones from 7 years to 9 years, with manufacturing and agricultural businesses eligible for up to 12 years of general excise tax exemption (increased from 10 years).

• Adds two new statutory definitions: "tangible personal property" (excludes electricity, real property, and intellectual property) and "value-added agricultural product" (processed goods meeting department of agriculture standards).

• Applies to businesses designated as qualified businesses on or after July 1, 2025, with tax credit provisions effective for taxable years beginning after December 31, 2025, and general excise tax changes effective January 1, 2027.

• Maintains prohibition on medical cannabis dispensaries as eligible business activities within enterprise zones.