Bill > SB592

This bill modifies Hawaii's tax treatment of Real Estate Investment Trusts (REITs), a type of company that owns, operates, or finances income-generating real estate. Specifically, the bill removes the dividends-paid deduction for REITs starting from taxable years beginning after December 31, 2025. Under the current law, REITs could deduct dividends paid that were attributable to income taxable in Hawaii, but after 2025, no such deduction will be allowed. The bill also adds new administrative requirements for REITs operating in Hawaii, including mandatory notification to the state department within 15 days of beginning operations, proper designation on tax returns, completing tax returns according to specific department instructions, and submitting a copy of their federal tax return with each state tax return. REITs that fail to comply with these new requirements will be assessed a penalty of $50 per day. The changes are intended to modify how REITs are taxed in Hawaii, potentially increasing state tax revenue from these investment vehicles.

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https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=592&year=2026