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Bill

Bill

SB 313

RELATING TO A WEALTH ASSET TAX.

2026 Regular Session Introduced by Karl Rhoads

Hawaii bill proposes annual wealth asset tax on high-net-worth individuals to generate state revenue, facing constitutional validity questions and implementation challenges.

Carried over to 2026 Regular Session.
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Bill Summary · SB 313

Legislative bill overview

SB 313 proposes implementing a wealth asset tax in Hawaii, targeting high-net-worth individuals' assets. The bill was introduced by Senator Karl Rhoads and passed its second reading with amendments in February 2025 before being carried over to the 2026 legislative session for further consideration.

Why is this important

A wealth asset tax would represent a significant shift in Hawaii's tax structure, potentially generating state revenue while raising constitutional and implementation questions. This type of tax is rare in the U.S. and could affect high-wealth residents' decisions about living and investing in Hawaii, making it economically consequential for the state.

Potential points of contention

  • Constitutional concerns: Federal courts have struck down similar wealth taxes in other states; Hawaii would face legal challenges regarding tax authority and due process
  • Implementation complexity: Valuing non-liquid assets (real estate, businesses, art) annually creates administrative burden and disputes over fair assessment
  • Economic competitiveness: High-wealth individuals and businesses may relocate to other states, potentially reducing overall tax base and economic activity in Hawaii
  • Definition and scope: Determining what counts as taxable wealth, exemption thresholds, and whether retirement accounts or primary residences are included creates fairness debates

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

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