HI HB947

Disallows the dividends paid deduction for real estate investment trusts (REITs) under Hawaii tax law, subjecting REIT dividends to the same tax treatment as dividends paid by other corporations

Amends Section 235-2.3 of the Hawaii Revised Statutes to add Internal Revenue Code Section 857(b)(2)(B) to the list of federal tax provisions not operative for Hawaii state tax purposes

Applies to taxable years beginning after December 31, 2025

Effectively increases state tax liability for REITs operating in Hawaii by eliminating a federal tax benefit that currently allows REITs to deduct dividends paid to shareholders from taxable income