Hawaii Senate Bill SB597

Hawaii 2024 Regular Session

• Introduced: 1/20/23
• Refer: 1/25/23
• Report Pass: 2/6/23
• Report Pass: 3/3/23
• Refer: 2/6/23
• Engrossed: 3/7/23
• Refer: 3/9/23

Caption

Relating To Taxation.

Impact

If enacted, SB597 would significantly modify the provisions of Section 235-7 of the Hawaii Revised Statutes. By excluding deferred compensation retirement income from taxable income for eligible taxpayers—i.e., those with an adjusted gross income below specified thresholds—the bill could provide substantial tax savings for many individuals. This change is expected to enhance the financial well-being of seniors, allowing them to allocate more resources towards essential goods and services.

Summary

Senate Bill 597 aims to alleviate the financial burden on senior citizens in Hawaii by amending state tax law to exclude income received from deferred compensation retirement plans from state income tax for certain taxpayers. The bill recognizes the inequities in the current taxation of retirement income and seeks to support seniors who struggle to meet their living expenses. This initiative is particularly relevant given Hawaii's high cost of living, which impacts the financial stability of many retirees.

Contention

While the bill has garnered support for addressing the needs of seniors, there may be points of contention regarding the fiscal implications of reducing state tax revenue. Opponents might argue that tax breaks for specific demographic groups could result in greater funding shortfalls for public services. Nevertheless, supporters contend that the long-term economic benefits from a supported aging population will outweigh the initial revenue impact.