Hawaii

In 2014-2018, the Hawaii legislature considered legislation that would eliminate the dividends paid deduction (DPD). In 2018, the Hawaii legislature again considered legislation to eliminate the DPD as well as to require REITs to withhold Hawaii taxes when dividends are distributed to shareholders.

 

In 2019, the legislature once again considered similar legislation, and both the House and Senate passed SB 301. SB 301 would have disallowed the DPD. On July 9, 2019, Governor Ige vetoed SB 301.

 

The following REIT-related bills were introduced in 2019 and carried over to 2020: HB 475 (which also passed the Hawaii House); HB 605; HB 740, HB 1064, HB 1290, SB 1510, and SB 675.

 

On Jan. 17, 2020, the following REIT-related bills were introduced in the Hawaii state legislature: SB 2698SB 2409, and SB 2697. SB 2698 would require REIT shareholder withholding. SB 2409 would establish a down payment program for returning residents, disallow the DPD and require shareholder withholding. SB 2697 would disallow the DPD for three years.

 

On Jan. 23, 2020, HB 2605 was introduced. It would disallow the DPD for four years. 

 

These bills would eliminate the REIT DPD or impose a shareholder withholding tax and information reporting requirement with respect to dividends paid by REITs.

On Jan. 28, 2020, the Senate Committee on Housing held a hearing on SB 2409, and deleted the REIT-related provisions before approving the bill.

On Feb. 7, 2020, the Hawaii House Committee on Economic Development & Business held a hearing on HB 2605, and approved the bill with minor amendments. The bill next moves to the House Committee on Finance.

On Feb. 18, 2020, the Hawaii Senate Committee on Ways & Means held a hearing on SB 2697. It approved the bill on Feb 27, 2020, after amending it to disallow the DPD except for REITs “where 100% of the [REIT’s] real property is used to provide affordable housing in [Hawaii].” “Affordable housing” is not defined. On Mar. 3, 2020, the full Senate approved the amended bill.

Nareit will continue to oppose anti-REIT legislation in Hawaii.
 


Archive

 

In connection with the Hawaii legislature’s 2019 session, the following REIT-related bills were introduced:

 

These bills would have eliminated the REIT DPD and/or imposed a shareholder withholding tax and information reporting requirement with respect to dividends paid by REITs. The Hawaii legislature passed SB 301, and Governor David Ige(D) vetoed the bill on July 9, 2019.