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HI HB2150

Bill

Official Source

Status

Introduced

1/28/2026

Primary Sponsor

Amy Perruso

Click for details

Origin

House of Representatives

2026 Regular Session

AI Summary

  • Disallows the dividends paid deduction for real estate investment trusts (REITs) operating in Hawaii, effective for taxable years beginning after December 31, 2025
  • Addresses an estimated $26.8 million in foregone state income tax revenue from REITs that currently enjoy exemption from paying taxes on dividends generated from Hawaii properties
  • References a 2016 study finding Hawaii received only $954,842 from in-state residents paying taxes on REIT dividend income, while the majority of REIT income taxes were paid to other states by out-of-state shareholders
  • Amends Section 235-2.3 of Hawaii Revised Statutes to make Internal Revenue Code Section 857(b)(2)(B) (the dividends paid deduction for REITs) inoperative for Hawaii state tax purposes
  • Modifies Section 235-71 to eliminate the dividends paid deduction for REITs while maintaining existing REIT reporting requirements and the $50 per day penalty for non-compliance

Legislative Description

Relating To Taxation.

Income Tax

Last Action

Referred to ECD, CPC, FIN, referral sheet 5

1/30/2026

Committee Referrals

Economic Development1/30/2026

Full Bill Text

No bill text available