Department and industry clash over bill to require periodic review of tax credits; film industry warns of job loss
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Summary
The Senate committee heard competing testimony over a proposal to require periodic review or automatic sunset of new or renewed tax credits, with DBEDT warning a blanket approach could deter film productions and industry witnesses saying the credits sustain local jobs.
A bill to require periodic review or sunset language for tax credits generated broad testimony from the Department of Business, Economic Development and Tourism and the state’s film industry.
Georgia Skinner of DBEDT said the department submitted written comments expressing concern a blanket sunset-review approach would send the wrong message to the film industry, which the agency described as a ‘‘bright spot’’ for jobs and local business. She said timing a repeal or sunset could discourage productions that are already fragile and noted the state aims to support film-sector jobs while improving administration and oversight.
Multiple industry witnesses urged caution about automatic sunsets or abrupt changes. Michael Goloje (Bridal Work Hawaii) and producer Daniel Hamilton Lehi described projects that would not come to Hawaii without tax incentives; set decorator Kat Chong and other union-affiliated crew members said the tax credit supports hundreds of local crew jobs and many local vendors. Tax-policy witnesses and advocates (Tax Foundation, Hawaii Children’s Action Network) urged stronger oversight or periodic review to ensure tax credits are achieving policy goals and to limit fiscal exposures.
Some supporters suggested the bill’s language only applies to credits established or renewed after Dec. 31, 2025. Testimony noted the state auditor already conducts rolling reviews of tax credits on a five-year cycle and Department of Taxation produces reports. Industry witnesses warned the bill’s perceived threat to the film tax credit could prompt productions to film elsewhere, citing competitiveness with other states’ incentives.
Committee members heard a mix of technical advice and anecdotal statements about local employment and vendor impacts. The committee did not adopt the measure during the excerpted session; the chair said some items would be deferred to another date for additional work and discussion.