S.B. 1260 Summary

• Establishes an agroecological and climate-smart farming practices income tax credit for qualified farmers in Hawaii, deductible from net income tax liability.

• Tax credit equals a specified percentage of qualified expenses, with a maximum of $25,000 per taxpayer per taxable year (percentage amount not specified in bill text).

• Total tax credits allowed statewide cannot exceed $1,000,000 per taxable year; taxpayers unable to claim credits due to the cap may carry them forward to subsequent years within five consecutive taxable years.

• Requires farmers to submit certified statements to the board of agriculture by March 31 each year identifying qualified expenses and credits claimed in the prior taxable year.

• Defines eligible practices as sustainable farming including soil health, fertility management, pest management, crop rotation, cover cropping, polycultures, and Native Hawaiian agricultural systems such as loi kalo, agroforestry, and loko ia fishponds.

• Applies to taxable years beginning after December 31, 2025.