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GM 1223

Informing the Legislature that on May 29, 2025, the Governor signed the following bill into law: SB1464 HD1 CD1 (ACT 123).

2025 Regular Session

Act 123 aligns Hawaii's income and estate tax laws with federal regulations, impacting taxpayers and estate planners by updating tax treatment and compliance requirements.

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Bill Summary · GM 1223

Summary of GM 1223: Proclamation of Act 123

Bill Information:
- Bill Number: GM 1223
- Title: Informing the Legislature that on May 29, 2025, the Governor signed the following bill into law: SB1464 HD1 CD1 (ACT 123).
- Status: Received
- Introduced: May 29, 2025
- Classification: Proclamation
- Subject: Act 123

Purpose and Intent

The primary purpose of GM 1223 is to inform the Hawaii State Legislature that the Governor has signed into law Senate Bill 1464, which is now designated as Act 123. This Act aims to align Hawaii's income and estate tax laws with the federal Internal Revenue Code (IRC), ensuring that state tax regulations reflect recent changes in federal tax law.

Key Provisions

Act 123 includes several significant amendments to the Hawaii Revised Statutes:

  1. Conformity to the Internal Revenue Code:

    • The Act updates the definition of the "Internal Revenue Code" to include the IRC as amended through December 31, 2024.
    • It specifies which provisions of the IRC will apply to Hawaii's tax laws, particularly concerning gross income, adjusted gross income, and taxable income.

  2. Tax Treatment Adjustments:

    • The Act incorporates various federal tax provisions into state law, including:
      • Tax treatment of targeted Economic Injury Disaster Loans (EIDL) advances.
      • Exclusions for certain recovery rebates and grants related to the COVID-19 pandemic.
      • Adjustments for charitable contributions and flexible spending arrangements.

  3. Effective Dates:

    • The provisions of Section 2 will apply to taxable years beginning after December 31, 2024.
    • The provisions of Section 3 will apply to decedents dying or taxable transfers occurring after December 31, 2024.

Who Would Be Affected

  • Taxpayers in Hawaii: Individuals and entities subject to Hawaii's income and estate taxes will be directly impacted by these changes, as they will need to comply with the updated tax regulations.
  • Estate Executors and Beneficiaries: Those involved in estate planning and administration will need to consider the new rules regarding estate and generation-skipping transfer taxes.

Procedural Aspects

  • The bill was signed into law by Governor Josh Green on May 29, 2025, and has been officially communicated to the legislative bodies.
  • The bill passed through both the Senate and House of Representatives before receiving the Governor's approval.

Conclusion

GM 1223 serves as a formal notification of the enactment of Act 123, which is a critical step in ensuring that Hawaii's tax laws remain consistent with federal regulations. This alignment is essential for maintaining clarity and compliance for taxpayers and tax administrators alike.

Compiled from official sources — confirm details with the bill’s official record.

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