If enacted, HB292 would mandate the Department of Taxation to suspend and refund certain income tax amounts by January 1, 2027, contingent upon a proposed constitutional amendment. This amendment would authorize the state to collect real property taxes, potentially allowing Hawaii to reduce reliance on income taxes while increasing property tax revenues. Doubling homeowner and senior exemptions is also a key aspect of the bill, intended to relieve financial burdens on local residents and ensure more favorable treatment for these groups.
Summary
House Bill 292 aims to reform the tax structure in Hawaii by eventually eliminating personal and corporate income taxes. The bill is premised on the need to provide the state with greater control over real property taxation, which is currently governed by counties. The legislature seeks to address the increasing levels of non-resident investment in Hawaii's real estate market, attributed to low property tax rates, with the goal of making the tax system more equitable and effective for residents and local authorities alike.
Contention
While the bill presents a forward-looking approach to taxation, it raises concerns regarding the authority shift from counties to the state level. Critics may argue that this centralization could undermine local governments' ability to adequately address community-specific needs or adapt to changing economic conditions. The potential repeal of counties' exclusive power in real property taxation could face opposition from local officials and residents who fear losing their voice in tax-related decisions.
Proposes amendment to Constitution to require each house of the Legislature to meet four times annually solely to vote on bills that provide property tax relief.
Proposes amendment to Constitution to require each house of the Legislature to meet four times annually solely to vote on bills that provide property tax relief.
Proposing Amendments To Articles Viii Of The Constitution Of The State Of Hawaii To Authorize The Legislature To Freeze Any Increase In State Residential Property Tax.