HI SR166

Requests the Hawaii Department of Taxation to conduct a comprehensive analysis of corporate income reporting structures, including how foreign subsidiary income is treated, to support long-term fiscal planning.

Analysis must evaluate potential revenue impacts under three alternative corporate 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 used by other states, identification of data limitations and modeling assumptions, and estimates of corporate tax revenue from corporations with foreign subsidiary structures.

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