HawaiiEnterprise zone rules would count some sales and services as eligible work
Businesses seeking enterprise zone benefits could qualify through certain sales, farm processing, or health services, and some tax benefits would last longer.
What it does
Certain retail sales by manufacturers, processing of farm products grown in an enterprise zone, and health care services would count as eligible activities. Medical cannabis dispensaries are excluded.
Qualified enterprise zone businesses would have up to nine years for certain state tax credits and general excise tax exemptions. Some manufacturers and agricultural businesses could receive a longer general excise tax exemption and three more years of credits.
Some businesses could qualify by meeting employee-growth targets through year nine or by increasing sales of crops grown or farm products processed in enterprise zones.
Argument forManufacturers, some farm businesses, and health care providers could qualify through more kinds of work, which may support jobs in enterprise zones.
Argument againstLonger tax credits and exemptions could mean less tax revenue for the state while qualifying businesses receive benefits for more years.
More detail
The bill would count certain retail sales, farm processing, and health care services as eligible business activities. Health care services must be provided by health care professionals in health-related fields. The farm-processing activity covers agricultural products and value-added agricultural products. Retail sales must be of goods the business made and sold in the enterprise zone for the buyer to use or consume, not resell. Farm products must be grown all or partly in an enterprise zone; value-added products must also meet criteria for the state quality seal program. Medical cannabis dispensary work is excluded. The bill states that the Act would take effect July 1, 2026.
The bill would provide longer periods for certain state tax credits and general excise tax exemptions. These periods apply to qualified businesses in state enterprise zones. The twelve-year general excise tax exemption and three additional years of state tax credits apply to the specified manufacturers and agricultural businesses. Qualified businesses could receive the state tax credit and general excise tax exemption for up to nine years. Businesses that make tangible goods or produce or process farm products could receive the general excise tax exemption for up to twelve years. For those manufacturers and agricultural businesses, the state tax credit could continue for three more years at 20 percent. Unused credits cannot carry forward. The tax credit provisions would apply to tax years beginning after December 31, 2026. The general excise tax exemption provisions would take effect January 1, 2028.
Some businesses could qualify through employee growth or increased sales of farm products. This provision applies to businesses designated as qualified businesses on or after July 1, 2026. The business must meet the other stated requirements and have been active in an eligible business activity before the area became an enterprise zone. It must either increase its average full-time employee count by the stated amounts or raise gross sales of crops produced or farm products processed in the enterprise zone by two percent annually. The employee targets include a ten percent increase by the end of year one and a fifteen percent increase by the end of years four through nine. Businesses with credits past year nine must maintain that higher level afterward. The provision applies to businesses designated as qualified on or after July 1, 2026.
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Where it stands
- Introduced
- Passed Senate
- Passed House
- To Governor
- Became Law
Looking ahead
No hearings or votes scheduled.
History
- 2026
- Jul 7Act 182, 07/06/2026 (Gov. Msg. No. 1284).Latest
- Jul 7Act 182, on 07/06/2026 (Gov. Msg. No. 1284).Became Law
- May 8Received notice of passage on Final Reading in House (Hse. Com. No. 888).Minor
- May 8Enrolled to Governor.To Governor
- May 6Passed Final Reading, as amended (CD 1). Ayes, 25; Aye(s) with reservations: none . 0 No(es): none. 0 Excused: none.Major
- Vote recorded Passed Final Reading as amended in CD 1. Result: pass.Lower
- May 6Passed Final Reading as amended in CD 1 with none voting aye with reservations; Representative(s) Iwamoto voting no (1) and none excused (0).Major
- May 6Received notice of Final Reading (Sen. Com. No. 816).Minor
- May 1Conference Committee Meeting will reconvene on Friday, 05-01-26 at 11:30AM in Conference Room 411.
- Vote recorded The Conference committee recommends that the measure be PASSED, WITH AMENDMENTS. Result: pass.Upper
- Vote recorded The Conference Committee recommends that the measure be Passed, with Amendments. Result: pass.Lower
- May 1Conference Committee Meeting will reconvene on Friday, 05-01-26 at 4:31PM in Conference Room 411.
- May 1The Conference committee recommends that the measure be PASSED, WITH AMENDMENTS. The votes of the Senate Conference Managers were as follows: 2 Aye(s): Senator(s) DeCoite, Hashimoto; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Fevella.Minor
- May 1The Conference Committee recommends that the measure be Passed, with Amendments. The votes were as follows: 5 Ayes: Representative(s) Ilagan, Kusch, Hussey, Tam, Gedeon; Ayes with reservations: none; 0 Noes: none; and 0 Excused: none.Minor
- May 1Reported from Conference Committee as amended CD 1 (Conf. Com. Rep. No. 227-26).
- May 148 Hrs. Notice (as amended CD 1) 05-06-26.
- May 1Reported from Conference Committee (Conf Com. Rep. No. 227-26) as amended in (CD 1).
- May 1Forty-eight (48) hours notice Wednesday, 05-06-26.
- Apr 30Conference Committee Meeting will reconvene on Friday 05-01-26 8:01AM in conference room 411.
- Apr 28Bill scheduled for Conference Committee Meeting on Thursday, 04-30-26 8:30AM in conference room 411.
- Apr 23Received notice of appointment of House conferees (Hse. Com. No. 811).Minor
- Apr 22House Conferees Appointed: Ilagan, Kusch, Hussey Co-Chairs; Tam, Gedeon.
- Apr 22Senate Conferees Appointed: DeCoite Chair; Hashimoto Co-Chair; Fevella.
- Apr 22Received notice of Senate conferees (Sen. Com. No. 723).Minor
- Apr 10Received from House (Hse. Com. No. 507).Minor
- Apr 10Senate disagrees with House amendments.Minor
- Apr 10Received notice of disagreement (Sen. Com. No. 564).Minor
- Apr 9Reported from FIN (Stand. Com. Rep. No. 2002-26), recommending passage on Third Reading.
- Vote recorded Passed Third Reading. Result: pass.Lower
- Apr 9Passed Third Reading with none voting aye with reservations; none voting no (0) and Representative(s) Cochran excused (1). Transmitted to Senate.Passed House
- Apr 7The committee on FIN recommend that the measure be PASSED, UNAMENDED. The votes were as follows: 15 Ayes: Representative(s) Todd, Takenouchi, Hartsfield, Hussey, Keohokapu-Lee Loy, Kitagawa, Kusch, Lee, M., Miyake, Perruso, Templo, Yamashita, Alcos, Gedeon, Reyes Oda; Ayes with reservations: none; 0 Noes: none; and 1 Excused: Representative(s) Morikawa.Minor
- Vote recorded The committee on FIN recommend that the measure be PASSED, UNAMENDED. Result: pass.Lower
- Apr 2The committee(s) on FIN recommend(s) that the measure be deferred until 04-07-26.Minor
- Apr 2Bill scheduled for decision making on Tuesday, 04-07-26 10:10AM in conference room 308 VIA VIDEOCONFERENCE.
- Mar 31Bill scheduled to be heard by FIN on Thursday, 04-02-26 2:00PM in House conference room 308 VIA VIDEOCONFERENCE.
- Mar 30Reported from AGR (Stand. Com. Rep. No. 1492-26) as amended in HD 2, recommending referral to FIN.
- Vote recorded Report adopted; referred to the committee(s) on FIN as amended in HD 2. Result: pass.Lower
- Mar 30Report adopted; referred to the committee(s) on FIN as amended in HD 2 with none voting aye with reservations; none voting no (0) and Representative(s) Cochran, Lowen, Perruso, Quinlan excused (4).Minor
- Mar 25The committee on AGR recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 4 Ayes: Representative(s) Chun, Kusch, Kahaloa, Lowen; Ayes with reservations: none; Noes: none; and 3 Excused: Representative(s) Perruso, Quinlan, Matsumoto.Minor
- Vote recorded The committee on AGR recommend that the measure be PASSED, WITH AMENDMENTS. Result: pass.Lower
- Mar 20Reported from ECD (Stand. Com. Rep. No. 1273-26) as amended in HD 1, recommending passage on Second Reading and referral to AGR.
- Vote recorded Passed Second Reading as amended in HD 1 and referred to the committee(s) on AGR. Result: pass.Lower
- Mar 20Passed Second Reading as amended in HD 1 and referred to the committee(s) on AGR with none voting aye with reservations; none voting no (0) and Representative(s) Quinlan excused (1).Minor
- Mar 20Bill scheduled to be heard by AGR on Wednesday, 03-25-26 9:15AM in House conference room 325 VIA VIDEOCONFERENCE.
- Mar 18The committee on ECD recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 6 Ayes: Representative(s) Ilagan, Hussey, Tam, Templo, Yamashita, Gedeon; Ayes with reservations: none; Noes: none; and Excused: none.Minor
- Vote recorded The committee on ECD recommend that the measure be PASSED, WITH AMENDMENTS. Result: pass.Lower
- Mar 12This measure has been deleted from the meeting scheduled on Friday 03-13-26 10:00AM in conference room 423 VIA VIDEOCONFERENCE.
- Mar 12Bill scheduled to be heard by ECD on Wednesday, 03-18-26 8:30AM in House conference room 423 VIA VIDEOCONFERENCE.
- Mar 10Pass First ReadingMinor
- Mar 10Referred to ECD, AGR, FIN, referral sheet 16Minor
- Mar 10Bill scheduled to be heard by ECD on Friday, 03-13-26 10:00AM in House conference room 423 VIA VIDEOCONFERENCE.
- Mar 6Report Adopted; Passed Third Reading. Ayes, 24; Aye(s) with reservations: none. Noes, 0 (none). Excused, 1 (Senator(s) Ihara). Transmitted to House.Passed Senate
- Vote recorded Report Adopted; Passed Third Reading. Result: pass.Upper
- Mar 6Received from Senate (Sen. Com. No. 52) in amended form (SD 1).Minor
- Mar 5Reported from WAM (Stand. Com. Rep. No. 2724) with recommendation of passage on Third Reading.
- Mar 5One Day Notice 03-06-26.
- Mar 2The committee(s) on WAM recommend(s) that the measure be PASSED, UNAMENDED. The votes in WAM were as follows: 13 Aye(s): Senator(s) Dela Cruz, Moriwaki, DeCoite, Elefante, Hashimoto, Inouye, Kanuha, Kidani, Kim, Lee, C., Richards, Wakai, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none.Minor
- Vote recorded The committee(s) on WAM recommend(s) that the measure be PASSED, UNAMENDED. Result: pass.Upper
- Feb 27The committee on WAM has rescheduled its decision making to 03-02-26 10:02AM; CR 211 & Videoconference.
- Feb 23The committee(s) on WAM will hold a public decision making on 03-02-26 10:31AM; Conference Room 211 & Videoconference.
- Feb 12Reported from EDT (Stand. Com. Rep. No. 2208) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM.
- Feb 12Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM.Minor
- Feb 5The committee(s) on EDT recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in EDT were as follows: 3 Aye(s): Senator(s) DeCoite, Fukunaga, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 2 Excused: Senator(s) Wakai, Kim.Minor
- Vote recorded The committee(s) on EDT recommend(s) that the measure be PASSED, WITH AMENDMENTS. Result: pass.Upper
- Feb 2The committee(s) on EDT has scheduled a public hearing on 02-05-26 1:00PM; Conference Room 229 & Videoconference.
- Jan 26Referred to EDT, WAM.Minor
- Jan 21Introduced and passed First Reading.Minor
- Jan 15Pending Introduction.Introduced
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