HB260 would eliminate Hawaii’s state fuel and oil taxes on motor fuels, including gasoline and diesel used for motor vehicles, beginning with taxable years after December 31, 2025. The bill amends Hawaii Revised Statutes section 243-4 to strike the state fuel tax amounts currently imposed on liquid fuel and diesel oil, while leaving in place the county fuel tax framework that is levied under a separate section. It also preserves existing refund and exemption provisions for certain non-highway uses, such as agricultural equipment and off-highway diesel use, and directs the Department of Taxation to adopt rules to administer refunds.
The bill further adds a consumer-protection provision stating that, to the extent practicable, tax savings from the repeal should be passed from distributors to consumers. Its stated purpose is to provide tax relief, reduce the burden of high gas prices, and lower the cost of living for Hawaii residents, especially working families who rely on personal vehicles.
Impact
HB260 would materially reduce state tax revenue by repealing the state-level fuel tax on gasoline, diesel, and certain other liquid fuels, while not altering county fuel taxes authorized elsewhere in statute. It would amend section 243-4 of the Hawaii Revised Statutes, changing the tax structure for fuel distributors and users, and would require the Department of Taxation to continue administering refunds and related rules for exempt uses. The bill would affect fuel distributors, motorists, agricultural users, and potentially county governments only indirectly, since the county fuel tax provisions remain intact.
Sentiment
The bill’s stated and apparent sentiment is strongly pro-relief and consumer-focused, with the sponsor framing it as a response to Hawaii’s high fuel-tax burden and the broader cost-of-living challenge. The available context shows no recorded committee testimony or votes, so there is no documented opposition or support beyond the bill text itself. Overall, the measure is presented as a tax-cut and affordability proposal rather than a regulatory change.
Contention
The main point of contention is likely fiscal: eliminating the state fuel tax would reduce a longstanding revenue source that supports transportation and other state functions, even though the bill does not spell out replacement funding. Another likely issue is whether distributors would actually pass savings through to consumers, since the bill only requires pass-through “as much as practicable,” which may be difficult to enforce. A further practical question is the interaction between the repeal of state fuel taxes and the continued imposition of county fuel taxes, which could limit the size of the consumer benefit.