Hawaii amends film tax credit law to include streaming productions

Hawaii's Senate has introduced a significant legislative bill, SB732, aimed at revitalizing the state's film and digital media industry. Proposed on February 11, 2025, the bill seeks to amend existing tax credit provisions to enhance the attractiveness of Hawaii as a filming location, particularly in light of the growing competition from other states and countries.

The primary purpose of SB732 is to require that any production costs exceeding $1 million be certified by an independent third-party certified public accountant. This measure is designed to ensure transparency and accountability in the claims made for the motion picture, digital media, and film production income tax credit. Additionally, the bill proposes to increase the total amount of tax credits available annually from $50 million to $60 million, thereby providing more financial support for qualifying productions.

One of the notable aspects of this bill is its inclusion of broadcast and streaming platform productions, which reflects the evolving landscape of media consumption and production. By broadening the scope of eligible productions, SB732 aims to attract a wider array of projects, potentially boosting local employment and economic activity in the creative sector.

However, the bill has not been without controversy. Critics have raised concerns about the potential for abuse of the tax credit system, particularly regarding the certification process. Some lawmakers argue that the requirement for independent certification could impose additional burdens on smaller production companies, potentially discouraging them from filming in Hawaii. Proponents, on the other hand, argue that the increased scrutiny will ultimately benefit the industry by ensuring that tax credits are awarded fairly and responsibly.

The implications of SB732 extend beyond the immediate financial benefits for the film industry. By reinforcing Hawaii's position as a desirable filming location, the bill could lead to increased tourism and related economic benefits, as successful productions often draw visitors eager to experience the locales featured on screen. Furthermore, the bill's focus on digital media aligns with broader trends in content consumption, positioning Hawaii to capitalize on the growing demand for diverse media offerings.

As the legislative process unfolds, stakeholders from various sectors will be closely monitoring the discussions surrounding SB732. The outcome could significantly shape the future of Hawaii's film and digital media landscape, influencing not only economic growth but also the cultural fabric of the state. The bill is set to take effect on July 1, 2050, applying to taxable years beginning after December 31, 2025, marking a pivotal moment for the industry as it prepares for a new era of production standards and opportunities.