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Hawaii Legislature agrees to income tax relief

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(The Center Square) – The Hawaii legislature ended its 2024 session with bills passed to bring income tax relief, tighten short-term rental regulations and funnel more money to Maui relief efforts.

House Bill 2404, which is currently on the governor’s desk, would incrementally increase the standard deduction amounts for filing status beginning after 2023 and annually adjust the income tax brackets and standard deduction amounts by a cost-of-living adjustment factor, according to the bill.

Gov. Josh Green is expected to sign it as the tax relief is included in his Green Affordability Plan.

“Enactment of HB 2404 will help offset the crippling inflation of the past few years; save Hawaii taxpayers billions of dollars in coming years; reposition the state from having one of the highest state income tax rates in the country to one of the lowest; lower Hawaii’s cost of living; fuel economic growth; and reverse or at least slow down the ongoing exodus of Hawaii residents,” said Keli’i Akina, Ph.D., the president and CEO of Grassroot Institute of Hawaii.

Green signed Senate Bill 2919, which increases zoning powers for counties, regulates short-term rentals, and expands the transient accommodations tax law to include certain shelters and vehicles.

Under the new law, counties get “home rule authority” to prevent vacation rentals where communities don’t want them.

The measure received pages of public testimony both in support and opposition. Some people who own rental properties criticized state leadership for blocking what they called the economic benefits of short-term rentals due to tourism being one of Hawaii’s big money-makers.

Those in support cited the negative impacts short-term rentals have on housing availability for residents.

“As we press forward with our ongoing wildfire response and recovery efforts, SB 2919 will be a pivotal tool to address Hawaii’s housing crisis, while ensuring our essential housing programs for Maui recovery remain robust,” the governor said. “Our commitment to maximizing housing availability on Maui and statewide persists, and the state continues to extend support to legal owners who contribute to Maui wildfire relief efforts.”

Maui relief efforts will also be getting a $362 million boost from Senate Bill 582, which the governor also signed into law. Now those who were not eligible for aid from the Federal Emergency Management Agency will be able to tap into $297 million allocated for this purpose.

Green also signed House Bill 2070, which will add more transparency to disaster relief fund solicitations by requiring disclosures, according to the governor’s office.