Hawaii House Bill HB293

Hawaii 2023 Regular Session

• Introduced: 1/20/23
• Refer: 1/25/23

Caption

Proposing An Amendment To Article Viii, Section 3 Of The Hawaii Constitution Relating To The Functions, Powers, And Duties Of Real Property Taxation.

Impact

Should this amendment be ratified, it may transform how real property taxes are assessed and collected across Hawaii. The bill not only intends to double the exemption amounts for homeowners and seniors, effectively reducing their tax obligations, but it also aims to eliminate personal and business income taxes entirely. This radical shift could result in significant changes to state budgeting and revenue allocation, raising questions about the sustainability of funding public services currently supported by income taxes. Proponents argue this could foster a more supportive climate for residents while simultaneously addressing the financial interests of the state.

Summary

House Bill 293 proposes an amendment to Article VIII, Section 3, of the Hawaii Constitution, aiming to revoke the exclusive authority of counties over real property taxation. The legislature identifies a pressing need for tax reform, citing Hawaii's dual status of having high income tax rates while simultaneously imposing low property tax rates. The bill seeks to create a more equitable tax system that alleviates the burden currently felt by residential taxpayers, particularly those subsidizing non-resident real estate investments in Hawaii. The proposed changes would allow both the state and counties to impose real property taxes, potentially shifting the entire tax responsibility structure in Hawaii.

Contention

The proposal has sparked debates among stakeholders concerning the distribution of tax burdens between residents and non-residents. Proponents view the bill as a necessary evolution in the tax code to prioritize local residents' wellbeing and economic stability. In contrast, critics express concern that shifting tax authority may diminish local control, undermining county governance and potentially leading to inconsistencies in how different regions handle tax laws. The political narrative surrounding this bill is expected to evolve as more stakeholders engage in discussions about the diversity of financial needs between various counties and their constituents.