Research Activities Tax Credit Amendments
Summary
Hawaii HB2546 has passed both chambers, amending the state's research activities tax credit for qualified high technology businesses. The bill removes prior-year expense requirements, changes the submission deadline from March 31 to March 1, and increases the annual statewide cap amount. When the cap is reached, credits will be divided proportionally among all qualified applicants. The Department of Business, Economic Development, and Tourism (DBEDT) must establish an annual application period and notify applicants of certified credit amounts.
What changed
The bill significantly modifies Hawaii's qualified high technology business research tax credit by eliminating the requirement that credits be reduced by research expenses in prior years. The submission deadline is moved earlier from March 31 to March 1, giving businesses less time to compile certified expenditure statements. The annual statewide cap is increased, and if total claims exceed the cap, credits will be distributed proportionally among all qualified applicants rather than on a first-come-first-served basis.
For qualified high technology businesses in Hawaii, these changes create both opportunities and tighter compliance requirements. Companies can now claim full credits for current-year qualified expenses regardless of prior-year activity, but must adapt to the earlier submission deadline. Businesses should establish internal processes to compile and certify expenditure documentation well before March 1 annually, and prepare for potential proportional reductions in credits during high-demand years.
What to do next
- Review and update research expense tracking to claim credits without prior-year expense requirements
- Adjust internal deadlines to meet the new March 1 submission deadline for certified statements to DBEDT
- Monitor DBEDT announcements for annual application period opening and proportional credit allocations
Source document (simplified)
ChangeBridge / Hawaii / HB2546 Passed HB2546 House Bill Passed 2026-03-10
Relating To Tax Credit For Research Activities.
Amends the tax credit for research activities by: allowing taxpayers to claim credits for all qualified research expenses without regard to prior-year expenses; amending from March 31 to March 1, the deadline for qualified high technology businesses to submit a written, certified statement to the Department of Business, Economic Development, and Tourism identifying its qualified expenditures and research activities tax credits claimed in the previous taxable year; increasing the annual statewide cap amount for the tax credit; requiring the tax credit to be divided between all qualified high technology businesses for that year on a proportional basis if the annual statewide cap is reached; and requiring DBEDT to establish an annual application period and notify each qualified high technology business applicant of the credit amount certified. Applies to costs incurred beginning after 12/31/2025. Effective 7/1/3050. (SD1)
Bill Details
State Hawaii
Session 2026 Regular Session
Chamber House
Official Source www.capitol.hawaii.gov/session/measure_ind...
LegiScan View on LegiScan
Sponsors
Nadine Nakamura (Rep - D) Daisy Hartsfield (Rep - D) Greggor Ilagan (Rep - D) Sue Keohokapu-Lee Loy (Rep - D) Lisa Kitagawa (Rep - D) Matthias Kusch (Rep - D) Tyson Miyake (Rep - D) Daynette Morikawa (Rep - D) Amy Perruso (Rep - D) Shirley Ann Templo (Rep - D)
Action History
2026-04-06 S The committee(s) on WAM recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in WAM were as follows: 12 Aye(s): Senator(s) Dela Cruz, Moriwaki, DeCoite, Elefante, Hashimoto, Inouye, Kanuha, Kidani, Kim, Richards, Wakai, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Lee, C.. 2026-04-01 S The committee(s) on WAM deferred the measure until 04-06-26 10:31AM; Conference Room 211 & Videoconference. 2026-03-30 S Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. 2026-03-30 S The committee(s) on WAM will hold a public decision making on 04-01-26 10:03AM; Conference Room 211 & Videoconference. 2026-03-30 S Reported from EDT (Stand. Com. Rep. No. 3238) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM. 2026-03-24 S The committee(s) on EDT recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in EDT were as follows: 4 Aye(s): Senator(s) DeCoite, Wakai, Kim, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Fukunaga. 2026-03-20 S The committee(s) on EDT has scheduled a public hearing on 03-24-26 1:04PM; Conference Room 229 & Videoconference. 2026-03-12 S Referred to EDT, WAM. 2026-03-12 S Passed First Reading. 2026-03-12 S Received from House (Hse. Com. No. 435). 2026-03-10 H Passed Third Reading as amended in HD 2 with Representative(s) Iwamoto voting aye with reservations; none voting no (0) and Representative(s) Pierick excused (1). Transmitted to Senate. 2026-03-06 H Forty-eight (48) hours notice Tuesday, 03-10-26. 2026-03-06 H Reported from FIN (Stand. Com. Rep. No. 1111-26) as amended in HD 2, recommending passage on Third Reading. 2026-03-02 H The committee on FIN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 16 Ayes: Representative(s) Todd, Takenouchi, Hartsfield, Hussey, Keohokapu-Lee Loy, Kitagawa, Kusch, Lee, M., Miyake, Morikawa, Perruso, Templo, Yamashita, Alcos, Gedeon, Reyes Oda; Ayes with reservations: none; Noes: none; and Excused: none. 2026-02-27 H Bill scheduled to be heard by FIN on Monday, 03-02-26 2:00PM in House conference room 308 VIA VIDEOCONFERENCE. 2026-02-19 H Passed Second Reading as amended in HD 1 and referred to the committee(s) on FIN with none voting aye with reservations; none voting no (0) and none excused (0). 2026-02-19 H Reported from ECD (Stand. Com. Rep. No. 511-26) as amended in HD 1, recommending passage on Second Reading and referral to FIN. 2026-02-13 H The committee on ECD recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 7 Ayes: Representative(s) Ilagan, Hussey, Holt, Tam, Templo, Yamashita, Gedeon; Ayes with reservations: none; Noes: none; and Excused: none. 2026-02-10 H Bill scheduled to be heard by ECD on Friday, 02-13-26 8:30AM in House conference room 423 VIA VIDEOCONFERENCE. 2026-02-02 H Referred to ECD, FIN, referral sheet 6 2026-01-28 H Introduced and Pass First Reading.
Votes
2026-03-24 Senate Economic Development and Technology: Passed, With Amendments Yea: 4 Nay: 0 2026-04-06 Senate Ways and Means: Passed, With Amendments Yea: 12 Nay: 0
Committee Referrals
2026-02-02 H Economic Development 2026-02-19 H Finance 2026-03-12 S Economic Development and Technology 2026-03-30 S Ways and Means
Bill Text Versions
2026-01-28 Introduced 2026-02-18 Amended 2026-03-07 Amended 2026-03-25 Amended
Subjects
Tax Credit Research Activities Qualified High Technology Businesses Annual Cap Tax Credit Distribution Certification DBEDT Legislative data powered by LegiScan (CC BY 4.0)
Named provisions
Related changes
Source
Classification
Who this affects
Taxonomy
Browse Categories
Get Government General alerts
Weekly digest. AI-summarized, no noise.
Free. Unsubscribe anytime.
Get alerts for this source
We'll email you when Hawaii Legislative Events publishes new changes.