Hawaii House Bill HB293

Hawaii 2024 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

One significant implication of HB293 is the proposed increase in homeowner and senior exemptions on real property taxes, a move designed to alleviate the tax burden on local residents. The bill could lead to the complete elimination of personal and business income taxes in Hawaii, as it seeks to replace these revenue sources with real property taxes. If ratified by voters, the constitutional amendment would empower the state to levy taxes that were previously under the sole jurisdiction of counties, potentially reshaping how local and state governments approach taxation.

Summary

House Bill 293 proposes an amendment to Article VIII, Section 3 of the Hawaii Constitution concerning the functions, powers, and duties related to real property taxation. The bill's primary goal is to alter the existing legal framework that grants counties exclusive authority over real property taxation. By repealing this exclusivity, the state aims to have greater control and flexibility over taxation policies, which proponents believe could lead to a more equitable tax structure in Hawaii.

Contention

The legislation has generated discussions around the fairness of the current tax system, especially given Hawaii's high income tax rates and low real property tax rates. Supporters argue that the existing setup unduly burdens local residents while favoring non-resident real estate investors. However, opponents may express concern that transferring tax authority from counties to the state could diminish local governments' ability to address community-specific needs and could lead to a one-size-fits-all approach to taxation, failing to consider unique local economic conditions.