HB1635 amends Hawaii’s income tax credit statute for motion picture, digital media, and film production to broaden the types of productions that can qualify. The bill updates definitions in section 235-17, HRS, to expressly include productions made for broadcast television and streaming platforms, including series pilots, single seasons within specified episode limits, specials, and certain single episodes. It also revises the definition of “commercial” to remove the exclusion for internet-only distribution, thereby allowing online-only advertising messages to qualify if they otherwise meet the statute’s requirements.
The bill also expands and clarifies what counts as “production,” “digital media,” “post-production,” and “qualified production costs,” while preserving exclusions for news, public affairs, non-national talk or magazine shows, sports, fundraising productions, private-purpose productions, and material prohibited by chapter 712. It specifies that eligible costs include a wide range of in-state preproduction, production, and post-production expenses, as well as travel, lodging, shipping, and other direct production costs approved by the department. The measure is set to apply to taxable years beginning after December 31, 2025, and includes a sunset/repeal date of January 1, 2033, when the statute would revert to its prior form.
HB1635 would expand eligibility for Hawaii’s Motion Picture, Digital Media, and Film Production Income Tax Credit, potentially increasing the number of productions and advertising projects that can claim the credit, especially streaming-platform content and internet-only commercials. By revising statutory definitions, it would affect both taxpayers in the entertainment and advertising industries and the Department of Taxation’s administration of the credit. The bill does not create a new credit, but it broadens the scope of existing qualifying activities and costs under section 235-17, HRS, with a scheduled repeal in 2033.
The available context shows no committee transcript or recorded votes, so there is no direct evidence of support or opposition from hearings. Based on the bill text and description, the measure appears to be framed as an economic-development and industry-competitiveness update aimed at modernizing the credit for current media distribution practices, including streaming and internet advertising. The referral to EDT and WAM suggests it was treated as both an economic development and fiscal issue.
The main points of potential contention are likely fiscal cost and the breadth of eligibility. Expanding the credit to streaming-platform productions and internet-only commercials could increase state tax expenditures, which may concern budget-focused lawmakers and fiscal committees. Another possible issue is whether the expanded definitions could benefit out-of-state production companies or projects with limited local economic spillover, while supporters would likely argue that the changes are necessary to keep Hawaii competitive in attracting modern film, digital, and advertising production work.