HB 2269

HOUSE OF REPRESENTATIVES
H.B. NO.
2269
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII
A BILL FOR AN ACT
RELATING TO THE MOTION PICTURE, DIGITAL MEDIA, AND FILM
PRODUCTION INCOME TAX CREDIT.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
���� SECTION 1.� Section
235-17, Hawaii Revised Statutes, is amended by
amending subsection (a) to read as follows:
���� "(a)� Any law to the
contrary notwithstanding, there shall be allowed to each taxpayer subject to
the taxes imposed by this chapter, an income tax credit that shall be
deductible from the taxpayer's net income tax liability, if any, imposed by this chapter
for the taxable year in which the credit is properly claimed. �The amount of the credit shall be:
���� (1)� [[Twenty-two]]
Twenty-seven per cent of the qualified production costs incurred by a
qualified production in any county of the State with a population of over seven
hundred thousand; or
���� (2)� [[Twenty-seven]] Thirty-two per cent of the qualified
production costs incurred by a qualified production in any county of the State
with a population of seven hundred thousand or less.
A qualified production
occurring in more than one county may prorate its expenditures based upon the
amounts spent in each county, if the population bases differ enough to change
the percentage of tax credit.
���� In the case of a partnership, S
corporation, estate, or trust, the tax credit allowable is for qualified
production costs incurred by the entity for the taxable year. �The cost upon which the tax credit is computed
shall be determined at the entity level. �Distribution and share of credit shall be
determined by rule.
���� If a deduction is taken under section 179
(with respect to election to expense depreciable business assets) of the
Internal Revenue Code of 1986, as amended, no tax credit shall be allowed for
those costs for which the deduction is taken.
���� The basis for eligible property for
depreciation of accelerated cost recovery system purposes for state income
taxes shall be reduced by the amount of credit allowable and claimed."
���� SECTION 2.�
Section 235-17, Hawaii Revised Statutes, is amended
by amending subsection (h) to read as follows:
���� "(h)� Every taxpayer
claiming a tax credit under this section for a qualified production shall, no
later than ninety days following the end of each taxable year in which
qualified production costs were expended, submit a written, sworn statement to
the department of business, economic development, and tourism that identifies:
���� (1)� All qualified production costs as provided by subsection (a), if
any, incurred in the previous taxable year;
���� (2)� The amount of tax credits claimed pursuant to this section, if any,
in the previous taxable year; and
���� (3)� The number of total hires versus the number of local hires by
category and by county.
This information may be
reported from the department of business, economic development, and tourism to
the legislature pursuant to subsection (i)(4).�
No later than January 1, 2027, and each January 1 thereafter, each
film production that is claiming a tax credit pursuant to section 235-17 shall
obtain an independent third-party certification of qualified production costs
eligible for the motion picture, digital media, and film production income tax
credit in the form of a tax opinion, as required under this subsection,
submitted to the department of business, economic development, and tourism."
���� SECTION 3.�
Section 235-17, Hawaii Revised Statutes, is amended
by amending subsection (l) to read as follows:
���� "(l)� Total tax credits claimed per qualified
production shall not exceed $17,000,000[[.]]; provided that productions
with qualified expenditures at a minimum of $60,000,000 shall not be subject to
the per production cap of $17,000,000."
���� SECTION 4.�
Section 235-17, Hawaii Revised Statutes, is amended by amending
subsection (n) to read as follows:
���� "(n)�
The total amount of tax credits allowed under this section in any
particular year shall be [[$50,000,000;]] $60,000,000; however, if
the total amount of credits applied for in any particular year exceeds the
aggregate amount of credits allowed for that year under this section, the
excess shall be treated as having been applied for in the subsequent year and
shall be claimed in the subsequent year; provided that no excess shall be
allowed to be claimed after December 31, [[2032.]] 2038."
���� SECTION 5.�
Section 235-17, Hawaii Revised Statutes, is amended by amending
subsection (o) to read as follows:
���� "(o)�
For the purposes of this section:
���� "Commercial":
���� (1)� Means
an advertising message that is filmed using film, videotape, or digital media,
for dissemination via television broadcast or theatrical distribution;
���� (2)� Includes
a series of advertising messages if all parts are produced at the same time
over the course of six consecutive weeks; and
���� (3)� Does
not include an advertising message with Internet-only distribution.
���� "Digital media" means production
methods and platforms directly related to the creation of cinematic imagery and
content, specifically using digital means, including but not limited to digital
cameras, digital sound equipment, and computers, to be delivered via film,
videotape, interactive game platform, or other digital distribution media.
���� "Post-production" means
production activities and services conducted after principal photography is
completed, including but not limited to editing, film and video transfers,
duplication, transcoding, dubbing, subtitling, credits, closed captioning,
audio production, special effects (visual and sound), graphics, and animation.
���� "Production" means a series of
activities that are directly related to the creation of visual and cinematic
imagery to be delivered via film, videotape, or digital media and to be sold,
distributed, or displayed as entertainment or the advertisement of products for
mass public consumption, including but not limited to scripting, casting, set
design and construction, transportation, videography, photography, sound
recording, interactive game design, and post-production.
���� "Qualified production":
���� (1)� Means
a production, with expenditures in the State, for the total or partial
production of a feature-length motion picture, short film, made-for-television
movie, commercial, music video, interactive game, television (inclusive of
broadcast and streaming platforms) series pilot, single season (up to
twenty-two episodes[[)]] for broadcast television and up to eight
episodes for an ongoing series for streaming platforms) of a [[television]]
series [[regularly]] filmed in the State [[(if]].� If the number of episodes per single
season for a broadcast series exceeds twenty-two, and if a streaming
series exceeds eight episodes, additional episodes for the same season
shall constitute a separate qualified production[[),]].� A "qualified production" also
includes a television or streaming platform special, single [[television]]
episode that is not part of a television or streaming platform series
regularly filmed or based in the State, national magazine show, [[or]] and
national talk show.� For the purposes of
subsections (d) and (l), each of the aforementioned qualified production
categories shall constitute separate, individual qualified productions; and
���� (2)� Does
not include:
��������� (A)� News;
��������� (B)� Public
affairs programs;
��������� (C)� Non-national
magazine or talk shows;
��������� (D)� Televised
sporting events or activities;
��������� (E)� Productions
that solicit funds;
��������� (F)� Productions
produced primarily for industrial, corporate, institutional, or other private
purposes; and
��������� (G)� Productions
that include any material or performance prohibited by chapter 712.
���� "Qualified production costs"
means the costs incurred by a qualified production within the State that are
subject to the general excise tax under chapter 237 at the highest rate of tax
or income tax under this chapter if the costs are not subject to general excise
tax and that have not been financed by any investments for which a credit was
or will be claimed pursuant to section 235-110.9.� Qualified production costs include but are
not limited to:
���� (1)� Costs
incurred during preproduction such as location scouting and related services;
���� (2)� Costs
of set construction and operations, purchases or rentals of wardrobe, props,
accessories, food, office supplies, transportation, equipment, and related
services;
���� (3)� Wages
or salaries of cast, crew, and musicians;
���� (4)� Costs
of photography, sound synchronization, lighting, and related services;
���� (5)� Costs
of editing, visual effects, music, other post-production, and related services;
���� (6)� Rentals
and fees for use of local facilities and locations, including rentals and fees
for use of state and county facilities and locations that are not subject to
general excise tax under chapter 237 or income tax under this chapter;
���� (7)� Rentals
of vehicles and lodging for cast and crew;
���� (8)� Airfare
for flights to or from Hawaii, and interisland flights;
���� (9)� Insurance
and bonding;
��� (10)� Shipping of equipment and supplies to or from
Hawaii, and interisland shipments; and
��� (11)� Other direct production costs specified by the
department in consultation with the department of business, economic
development, and tourism;
provided
that any government-imposed fines, penalties, or interest that are incurred by
a qualified production within the State shall not be "qualified production
costs".� "Qualified production
costs" does not include any costs funded by any grant, forgivable loan, or
other amounts not included in gross income for purposes of this chapter.
���� "Streaming
platform" means an online provider of entertainment (music, movies, etc.) that
delivers the content via an Internet connection to the subscriber's computer,
television, or mobile device through a paid subscription."
���� SECTION 6.�
Act 88, Session Laws of Hawaii 2006, as amended by section 3 of Act 89,
Session Laws of Hawaii 2013, as amended by section 3 of Act 143, Session Laws
of Hawaii 2017, as amended by section 4 of Act 217, Session Laws of Hawaii 2022,
is amended by amending section 4 to read as follows:
���� "SECTION 4.� This Act shall take effect on July 1, 2006;
provided that:
���� (1)� Section
2 of this Act shall apply to qualified production costs incurred on or after
July 1, 2006, and before January 1, [[2033;]] 2038; and
���� (2)� This
Act shall be repealed on January 1, [[2033,]] 2038, and section
235-17, Hawaii Revised Statutes, shall be reenacted in the form in which it
read on the day before the effective date of this Act."
���� SECTION 7.�
Act 143, Session Laws of Hawaii 2017, is amended by amending section 6
to read as follows:
���� "SECTION 6.� [[No later than January 1, 2018, and each
January 1 thereafter, each film production that has production expenditures of
$1,000,000 or more and is claiming a tax credit pursuant to section 235-17,
Hawaii Revised Statutes, shall obtain an independent third party certification
of qualified production costs eligible for the motion picture, digital media,
and film production income tax credit in the form of a tax opinion, as required
under section 235-17(h), Hawaii Revised Statutes, submitted to the department
of business, economic development, and tourism.]] Repealed."
���� SECTION 8.�
Statutory material to be repealed is bracketed and stricken.� New statutory material is underscored.
���� SECTION 9.�
This Act, upon its approval, shall take effect retroactively on January
1, 2026.
INTRODUCED BY:
_____________________________
BY
  REQUEST
Report Title:
Motion Picture, Digital Media, and Film Production Income
Tax Credit; Qualified Production; Department of Business, Economic Development,
and Tourism
Description:
Increases the qualified production credit from twenty-two
per cent to twenty-seven per cent in
any county of the State with a population of over seven hundred thousand and
twenty-seven per cent to thirty-two per cent in any county of the State with a
population of less than seven hundred thousand.� Lifts the per production cap of $17,000,000
for productions with qualified expenditures of $60,000,000 per project.� Increases the annual cap to $60,000,000 from
$50,000,000 for the total amount of the motion picture, digital media, and film
production income tax credit allowed under section 235-17, HRS, and extends the
sunset date of the tax credit to January 1, 2038.� Clarifies and amends the requirement for an
independent third-party certification and expands the definition of "qualified production" to include streaming
platforms for the motion picture, digital media, and film production income tax
credit.� Includes a definition of "streaming platform".
The summary description
of legislation appearing on this page is for informational purposes only and is
not legislation or evidence of legislative intent.