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Bill

HB 476

RELATING TO CAPITAL GAINS TAX.

2026 Regular Session Introduced by Daniel Holt and 3 co-sponsors

Hawaii HB 476 proposes implementing a capital gains tax on investment profits to generate state revenue, with committee amendments approved but final passage deferred to 2026.

Carried over to 2026 Regular Session.
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Bill Summary · HB 476

Legislative bill overview

HB 476 proposes to implement a capital gains tax in Hawaii, likely targeting profits from the sale of investment assets, real estate, or securities. The bill was introduced in the 2025 session, underwent committee amendments, and was carried over to the 2026 Regular Session for further consideration.

Why is this important

A capital gains tax would create a new revenue stream for Hawaii's state budget, potentially generating millions in tax revenue. This affects investment returns for individuals and businesses, real estate transactions, and could influence investment and economic development decisions in the state.

Potential points of contention

  • Economic competitiveness: Hawaii's lack of a capital gains tax has been a factor in business location decisions; introducing one could impact investment attraction and competitiveness with other states
  • Burden on residents and retirees: Many middle-class Hawaii residents rely on investment income; a capital gains tax could affect retirement savings and nest eggs, particularly for those on fixed incomes
  • Real estate market impacts: If real property gains are taxable, this could increase costs for homeowners selling property and potentially cool an already expensive housing market
  • Definition and implementation challenges: The specific rate, exemptions (primary residences, retirement accounts, agricultural land), holding periods, and revenue allocation remain unclear and could significantly affect who bears the actual tax burden

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

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