summary
Introduced
01/26/2026
01/26/2026
In Committee
03/06/2026
03/06/2026
Crossed Over
03/10/2026
03/10/2026
Passed
Dead
Introduced Session
2026 Regular Session
Bill Summary
Taxes capital gains tax for individuals, estates, and trusts as ordinary income, except for capital gains that are eligible for a county homeowner's exemption. Repeals the alternative capital gains tax for corporations. Applies to taxable years beginning after 12/31/2026. Effective 7/1/3000. (HD2)
AI Summary
This bill amends Hawaii's tax laws to change how capital gains are taxed. Specifically, it will require individuals, estates, and trusts to pay taxes on their net capital gains at the same rate as ordinary income, except for capital gains derived from the sale of real property that is used as a principal home and qualifies for a county homeowner's exemption. The bill also repeals the alternative capital gains tax for corporations, meaning corporations will no longer have a special tax rate for capital gains and will be taxed on them as ordinary income. These changes are set to take effect for taxable years beginning after December 31, 2026, with the law itself becoming effective on July 1, 3000.
Committee Categories
Budget and Finance, Business and Industry
Sponsors (3)
Last Action
Passed Third Reading as amended in HD 2 with Representative(s) Reyes Oda, Souza voting aye with reservations; Representative(s) Alcos, Amato, Garcia, Gedeon, Kong, Matsumoto, Muraoka, Shimizu voting no (8) and Representative(s) Pierick excused (1). Transmitted to Senate. (on 03/10/2026)
Official Document
bill text
bill summary
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bill summary
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bill summary
| Document Type | Source Location |
|---|---|
| State Bill Page | https://www.capitol.hawaii.gov/session/measure_indiv.aspx?billtype=HB&billnumber=1850&year=2026 |
| BillText | https://www.capitol.hawaii.gov/sessions/session2026/bills/HB1850_HD2_.HTM |
| Committee Report HB1850_HD2_HSCR1117-26_ | https://www.capitol.hawaii.gov/sessions/session2026/CommReports/HB1850_HD2_HSCR1117-26_.pdf |
| HB1850_HD1_TESTIMONY_FIN_03-02-26_ | https://www.capitol.hawaii.gov/sessions/session2026/Testimony/HB1850_HD1_TESTIMONY_FIN_03-02-26_.PDF |
| BillText | https://www.capitol.hawaii.gov/sessions/session2026/bills/HB1850_HD1_.HTM |
| Committee Report HB1850_HD1_HSCR294-26_ | https://www.capitol.hawaii.gov/sessions/session2026/CommReports/HB1850_HD1_HSCR294-26_.pdf |
| HB1850_TESTIMONY_ECD-TOU_02-04-26_ | https://www.capitol.hawaii.gov/sessions/session2026/Testimony/HB1850_TESTIMONY_ECD-TOU_02-04-26_.PDF |
| BillText | https://www.capitol.hawaii.gov/sessions/session2026/bills/HB1850_.HTM |
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