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Bill

HB 2578

RELATING TO DUE PROCESS FOR ESTABLISHING PERSONAL LIABILITY FOR TAX.

2026 Regular Session Introduced by Jenna Takenouchi

HB 2578 requires Hawaii to provide due process procedures before imposing personal tax liability on individuals, protecting taxpayers from unfair assessment and enforcement actions.

Received from House (Hse. Com. No. 118).
#appeals #dueprocess #generalexcisetax #personalliability
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Bill Summary · HB 2578

Legislative bill overview

HB 2578 establishes due process protections for individuals facing personal liability determinations in Hawaii tax matters. The bill ensures that taxpayers receive proper procedural safeguards before the state can hold them personally responsible for tax obligations. This addresses situations where tax liability might extend beyond a business entity to individual owners or officers.

Why is this important

Tax liability determinations can have severe financial consequences for individuals, potentially affecting personal assets and credit. Without adequate due process protections, taxpayers could face personal liability without adequate opportunity to contest assessments or present their case. This bill strengthens accountability in state tax administration and protects individual rights during enforcement actions.

Potential points of contention

  • Scope of personal liability: Disagreement over which circumstances should trigger personal liability (corporate veil piercing, successor liability, trust fund taxes) and how broad the protections should be
  • Administrative burden: Concerns that enhanced due process requirements could slow tax collection, increase administrative costs, or create loopholes for tax avoidance
  • State revenue impact: Potential worry that stronger taxpayer protections could reduce state tax collections if more assessments are successfully challenged or overturned

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

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