HI SCR185

Requests the Department of Taxation to conduct a comprehensive analysis of corporate income reporting practices, including how foreign subsidiary income is treated under Hawaii's tax system.

Analysis must evaluate potential revenue impacts under three alternative corporate income reporting models: separate entity reporting, water's-edge combined reporting, and worldwide combined reporting.

Department must assess administrative feasibility, compliance costs, enforcement implications, and how alternative tax base definitions would interact with Hawaii's current apportionment methodology.

Report must include comparison of approaches taken by other states, identification of data limitations and modeling assumptions, and estimates of corporate income tax revenue from corporations with foreign subsidiary structures.

Department of Taxation must submit findings to the Legislature no later than twenty days prior to the Regular Session of 2027.