Committee moves amended film tax package forward as industry pleads for stability

The House Committee on Finance recommended passage with amendments of Senate Bill 732 SD2 HD1, a comprehensive package to update Hawaii’s film and television tax incentives after an extensive day of testimony from industry representatives, labor unions, local businesses and some opponents.

Industry advocates and local crew described an immediate economic shortfall. "Our studios were full. We have two huge studios... and they're both vacant right now," said Brian Cohn, Maui’s film commissioner, describing production losses since major shows left. He and others urged prompt action to restore a stable and competitive credit so productions return and local vendors and crews can find work.

Union leaders and guilds testified that film production drives widely distributed local spending: the Honolulu Film Office provided a case study showing one series spent tens of millions in the islands and supported hundreds of local jobs. IATSE Local 665 and the Teamsters urged amendments that increase local hire incentives and classify productions to qualify for lower general excise tax rates on manufacturing‑style activity.

Opponents and alternative proposals: one testifier urged a state‑run film fund rather than a refundable tax credit, saying a publicly funded production budget would better guarantee local benefits and avoid reliance on foreign or out‑of‑state investors. The Tax Foundation offered technical comments; Department of Taxation provided programmatic suggestions.

Committee amendments and path forward: lawmakers adopted a package of changes that the chair described as a pathway to restore competitiveness and add guardrails. The committee report adds a 5‑year phased rewiring of the credit rate structure (a planned multi‑year tapering of certain incentive features set to begin in 2028 in the committee’s draft) and retains a county permit/fee‑waiver measure for some local site work. The chair said the amendments and a sunset/phase‑down framework are intended to start negotiations with the Senate in conference.

Economic tradeoffs and next steps: testimony repeatedly emphasized the ripple effect to restaurants, equipment vendors, transportation and hospitality workers. Lawmakers acknowledged the fiscal tradeoffs of tax credits and signaled that conference negotiations will need to reconcile a capped credit, any increases in the annual cap, local‑hire uplifts and potential offsets elsewhere in the tax code.

Ending: With broad industry support and some calls for caution from analysts, HB 732 was advanced with committee amendments; details on caps, exact rates and the multi‑year transition will be resolved in conference negotiations.