Informing the Legislature that on May 19, 2026, the Governor signed the following bill into law: HB1688 HD1 SD2 CD1 (ACT 020).

2026 Regular Session

Hawaii exempts GET on materials, parts, or tools for aircraft service/maintenance and facility construction, aiding aviation maintenance in Hawaii.

Received.

#act020

Summary of Bill GM 1120 (HB 1688, CD1) – Hawaii, 2026

Note: This summary reflects the enacted act as of May 19, 2026 (Act 020) and describes the bill's purpose, key provisions, affected parties, and timelines.

Purpose and intent

The Act amends Hawaii’s General Excise Tax (GET) provisions to create a broad GET exemption for materials, parts, or tools used in:

Aircraft service and maintenance, and
Construction of aircraft service and maintenance facilities.

The underlying goal is to align Hawaii with several other states that exempt aircraft parts from sales taxes when sold to air carriers, strengthen Hawaii’s competitiveness, and protect/expand aircraft maintenance jobs and facilities in the state.

Key provisions and changes

Section 1: Legislative findings and intent

States that multiple states already exempt aircraft parts from sales tax when sold to air carriers. Hawaii’s prior exemption language for aircraft servicing and maintenance did not clearly exempt sales of parts to air carriers under GET, despite complementary use tax exemptions for imports from out-of-state sellers.
The Act establishes a GET exemption for:
Sale of material, parts, or tools used for aircraft service and maintenance, and
Construction of an aircraft service and maintenance facility.

Section 2: GET statute amendments (Section 237-24.9)

The title and subsection (a) are amended to read:
GET shall not apply to amounts related to the servicing and maintenance of aircraft, construction of an aircraft service and maintenance facility in the State, or the sale of material, parts, or tools to an air carrier (as defined by the Federal Aviation Act of 1958) when purchased for aircraft service and maintenance or facility construction.
This creates a broad GET exemption for these transactions.

Section 3: Repeal and modification

Repeals bracketed language and replaces with new statutory text (i.e., aligns language to implement the exemption).

Section 4: Effective date

The Act takes effect on January 1, 2027.

Who or what is affected

Aircraft maintenance providers and service facilities in Hawaii.

Vendors and suppliers selling materials, parts, or tools for aircraft service and maintenance or facility construction (to air carriers and maintenance operations in Hawaii).

Air carriers benefiting from the exemption when purchasing covered parts, materials, or tools for maintenance in Hawaii.

Procedural and timeline details

Legislative history:

Final passage and certification occurred in May 2026.
Signed by the Governor and designated as Act 020.

Effective date:

January 1, 2027.

Administrative notes:

The statutory language clarifies that the GET exemption applies specifically to purchases for aircraft service/maintenance and for building facilities, aligning with use tax exemptions and broader statutory exemptions.

Potential impact

Tax relief for Hawaii-based aircraft maintenance and related construction activities, potentially reducing operating costs for maintenance providers and improving the state’s attractiveness to the aviation industry.

Could influence pricing and competitiveness of aircraft maintenance services in Hawaii relative to other states.

May impact state revenue from GET on exempt transactions; effect depends on volume of exempt purchases.