HI HB1807

Imposes a 3% surtax on taxable income exceeding $1,000,000 for joint filers, $750,000 for heads of household or surviving spouses, and $500,000 for single filers or married individuals filing separately.

Threshold amounts will be adjusted annually for inflation using the same method as federal income tax brackets.

Revenue collected from the surtax is designated for public education and transportation purposes, subject to legislative approval.

Applies to taxable years beginning after December 31, 2025.

Fewer than 0.5% of Hawaii households earn over $1,000,000 annually; the bill aims to address tax burden inequity where the lowest 20% of earners pay 14% of income in state and local taxes while the top 1% pay only 10%.