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HB 1688

RELATING TO A GENERAL EXCISE TAX EXEMPTION FOR AIRCRAFT MAINTENANCE.

2026 Regular Session Introduced by Greggor Ilagan and 2 co-sponsors

HB 1688 exempts aircraft maintenance services from Hawaii's general excise tax to reduce operational costs and boost the state's aviation maintenance sector competitiveness.

Act 020, 05/19/2026 (Gov. Msg. No. 1120).
#aircraftserviceandmaintenance #generalexcisetax #taxation
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Bill Summary · HB 1688

Legislative bill overview

HB 1688 proposes to exempt aircraft maintenance services from Hawaii's general excise tax (GET), a statewide sales-type tax currently applied to most goods and services. The bill would reduce the tax burden on maintenance operations performed on aircraft, potentially benefiting both commercial and private aviation sectors operating in Hawaii.

Why is this important

Aircraft maintenance is a significant operational cost for airlines and aviation businesses. A GET exemption could improve the economic competitiveness of Hawaii-based maintenance operations and potentially attract maintenance contracts to the state. However, this also represents foregone state tax revenue that would need to be absorbed elsewhere or could impact other budget priorities.

Potential points of contention

  • Revenue impact: Removing GET on aircraft maintenance reduces state tax collection; the fiscal note will be critical to understanding the magnitude of lost revenue
  • Scope ambiguity: Unclear whether this applies only to commercial aircraft, private aircraft, or both, and whether it covers all maintenance-related services or only specific categories
  • Economic equity: Other industries may question why aviation receives preferential tax treatment while they remain subject to the full GET rate

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

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