HI SB2738

Requires corporations to report all income from foreign subsidiaries by filing IRS Form 5471 with the Hawaii Department of Taxation, with such income apportioned as business income under existing state formulas.

Mandates state-by-state reporting of all profits, losses, revenues, inter-company transactions, and taxes paid in other states by corporations subject to Hawaii income tax.

Estimated to generate $38 million annually in additional state revenue by implementing worldwide combined reporting to close offshore tax haven loopholes.

Deposits revenues from the newly taxed foreign subsidiary income into the state general fund for critical public services.

Applies to taxable years beginning after December 31, 2027, with violations subject to penalties under Hawaii Revised Statutes Chapter 231.