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Senate approves SB 31 25 SD1 to pause parts of Act 46 tax relief after floor debate
Summary
After floor debate on fiscal risks and household impacts, the Senate passed SB 31 25 SD1, a measure that keeps core tax relief for lower-income households while proposing sunsets and structural changes to several credits. The bill passed third reading 23–2; Senators Awa and DeCorte recorded no votes.
The Senate passed SB 31 25 SD1, a measure intended to preserve key tax relief from Act 46 of 2024 while pausing or sunsetting certain tax credits, by a 23–2 vote after floor debate.
Senator Dela Cruz, chairing the Ways and Means committee discussion on the floor, said the proposal seeks to balance maintaining relief for working families with the state’s deteriorating revenue picture. “Act 46 of 2024 was landmark legislation that provided comprehensive tax relief for Hawaii's residents,” he said, and the bill’s changes are intended to “help the state meet its goals while also preserving the historic tax breaks for working families.” He described targeted steps including sunsetting some tax credits on 01/01/2029 and structural changes to credits such as the child and dependent care credit.
Supporters said the approach protects households earning less than the bill’s stated thresholds (joint filers under $350,000; head-of-household filers under $262,500; individual filers under $175,000) while creating time to review credit effectiveness. “SB 31 25 SD1 combined with other actions will help the state meet its goals while also preserving the historic tax breaks for working families,” Dela Cruz said.
Opponents warned the pause would break expectations for families and businesses. Senator DeCorte said Hawaii already is one of the most expensive states and argued delaying credits will hurt local families and small businesses: “Now we are consistently ranked one of the worst states in the country to own and operate a business,” she said, and added that withdrawing promised relief risks worsening hardship for households.
Senator McKelvey, speaking in strong support, framed the measure as a temporary and responsible pause to protect working people and to ensure federal funding shortfalls do not destabilize essential services. Senator Rhodes also urged the Senate to preserve relief for lower-income residents while reining in credits that benefit higher-income taxpayers.
The Senate recorded two no votes: Senators Awa and DeCorte. The clerk announced the tally as 23 ayes and 2 noes; the presiding officer declared SB 31 25 SD1 passed third reading.
The bill includes specified income thresholds for continued relief and proposes sunsets and reviews for certain credits; the clerk gave the formal third-reading vote on the floor. The measure will proceed through the usual legislative process following passage in the Senate.
