Governor Josh Green has passed a law preserving many of the tax cuts he had previously announced would be suspended.
At the start of the 2026 legislative session, Green announced that the next in a series of incremental tax cuts would be paused in order to make up for an alleged $3 billion shortfall in the state budget.
Green had set those tax cuts in 2024, touting them as “the largest income tax cut in the state’s history.” In most years between 2024 and 2031, the cuts would have amended income tax brackets and increased standard deduction amounts.
But while Green introduced Senate Bill 3125 to suspend those cuts after 2026, the version of that bill he signed Thursday maintains some of the cuts after all.
The bill — now enrolled into law as Act 24 — maintains the future cuts for single filers making less than $175,000 per year, heads of household making under $262,500 and joint filers making under $350,000. It also includes a new tax bracket for households making $1 million or more annually, and subjects them to a 13% marginal tax rate.
In a statement Thursday, Green said the law is “a balanced and responsible approach to safeguarding Hawai‘i's financial future.”
“It preserves meaningful tax relief for working families while ensuring we have the resources to protect essential services that our residents depend upon every day," read Green's statement.
SB 3125 also scales down a renewable energy tax credit over the next several years, establishing caps on the total number of credits issued each year for wind and solar power systems between 2027 and 2030 — each year is capped at $40 million. Then, in 2031 and beyond, that cap is zeroed out, with no further credits available.
Green’s announcement Thursday also stated that he is working with private entities to bring investments to support the renewable energy industry “in the very near future,” as well as developing larger-scale renewable energy tax credits.
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