Hawaii House Bill HB1807

Hawaii 2026 Regular Session

• Introduced: 1/23/26
• Refer: 1/26/26

Caption

RELATING TO TAXATION.

Summary

HB1807 would create a new high-earners income tax surtax in Hawaii. The bill imposes an additional 3% tax on the portion of a taxpayer’s taxable income above specified thresholds: $1,000,000 for joint filers, $750,000 for heads of household and surviving spouses, and $500,000 for unmarried individuals and married individuals filing separately. The surtax would apply on top of existing income taxes and would begin for taxable years after December 31, 2025. The bill also directs the Department of Taxation to adjust the income thresholds annually for cost-of-living changes using the same method used for federal income tax bracket indexing. Revenue collected from the surtax would be dedicated to public education and transportation purposes, subject to legislative approval, and the department would report annual collections to the director of finance. The measure amends Chapter 235 of the Hawaii Revised Statutes and would primarily affect very high-income taxpayers.

Impact

HB1807 would add a new surtax provision to Hawaii’s income tax code, increasing the tax liability of taxpayers with income above the stated thresholds. It would create a dedicated revenue stream for education and transportation, while also requiring annual inflation adjustments to the surtax thresholds and reporting of collections. The bill would not change tax rates for most residents, but it would materially affect high-income households and the state’s revenue structure if enacted.

Sentiment

The bill text reflects a strongly supportive policy rationale for taxing high earners more heavily, emphasizing equity, income inequality, and funding for public services. The available context shows no recorded committee testimony or votes, so there is no documented opposition or support beyond the bill’s own findings and purpose statement. Procedurally, the measure was referred to ECD and FIN, indicating it was still in the committee process.

Contention

The main point of contention is likely to be the policy choice to impose a new 3% surtax on income above high thresholds, which supporters frame as a fair way to fund schools and transportation and to rebalance the tax burden. Potential critics would likely focus on the effect on high-income taxpayers, concerns about tax competitiveness, and whether dedicating the revenue to specific purposes is the best fiscal approach. However, no committee transcript or vote record is available here to show specific arguments from legislators, agencies, or the public.