Bill > SB1404

This bill increases the tax rate on cigarettes and little cigars from 16 cents to 21 cents per cigarette or little cigar starting January 1, 2026, and modifies the disposition of tobacco tax revenues beginning in fiscal year 2025-2026. The bill restructures how tobacco tax revenues are allocated to several special funds, setting new limits for each fund. Specifically, it caps the following allocations: 25% or $14,080,000 (whichever is less) to the Hawaii Cancer Research Special Fund, 25% or $7,400,000 to the Trauma System Special Fund, 25% or $8,800,000 to the Community Health Centers Special Fund, and 25% or $8,800,000 to the Emergency Medical Services Special Fund. Any excess tax revenues beyond these specified amounts will carry over to the general fund. Additionally, the bill expands the tax disposition to include all tobacco product taxes, not just cigarette taxes, and repeals several historical tax rate provisions that are now obsolete. The new tax rates and fund allocations will take effect on July 1, 2025, with the department required to provide an annual accounting of these fund dispositions to the legislature.

Business and Industry

https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=SB&billnumber=1404&year=2026