HOUSE OF REPRESENTATIVES

H.B. NO.

1635

THIRTY-THIRD LEGISLATURE, 2026

 

STATE OF HAWAII

 

 

 

 

 

 

A BILL FOR AN ACT

 

 

relating to taxation.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 

     SECTION 1.  Section 235-17, Hawaii Revised Statutes, is amended by amending subsection (o) to read as follows:

     "(o)  For the purposes of this section:

     "Commercial":

     (1)  Means an advertising message that is filmed using film, videotape, or digital media, for dissemination via television broadcast or theatrical distribution; and

     (2)  Includes a series of advertising messages if all parts are produced at the same time over the course of six consecutive weeks[; and

     (3)  Does not include an advertising message with Internet-only distribution].

     "Digital media" means production methods and platforms directly related to the creation of cinematic imagery and content, specifically using digital means, including but not limited to digital cameras, digital sound equipment, and computers, to be delivered via film, videotape, interactive game platform, or other digital distribution media.

     "Post-production" means production activities and services conducted after principal photography is completed, including but not limited to editing, film and video transfers, duplication, transcoding, dubbing, subtitling, credits, closed captioning, audio production, special effects (visual and sound), graphics, and animation.

     "Production" means a series of activities that are directly related to the creation of visual and cinematic imagery to be delivered via film, videotape, or digital media and to be sold, distributed, or displayed as entertainment or the advertisement of products for mass public consumption, including but not limited to scripting, casting, set design and construction, transportation, videography, photography, sound recording, interactive game design, and post-production.

     "Qualified production":

     (1)  Means a production, with expenditures in the State, for the total or partial production of a feature-length motion picture, short film, made-for-television movie, commercial, music video, interactive game, television (including broadcast and streaming platforms) series pilot, single season (up to twenty-two episodes[)] for broadcast television and up to eight episodes for an ongoing series for streaming platforms) of a [television] series [regularly] filmed in the State [(if].  If the number of episodes per single season for a broadcast television series exceeds twenty-two, and if the number of episodes per single season for a streaming platform series exceeds eight, additional episodes for the same season shall constitute a separate qualified production[),].  "Qualified production" also includes a television or streaming platform special, single [television] episode that is not part of a television or streaming platform series regularly filmed or based in the State, national magazine show, [or] and national talk show.  For the purposes of subsections (d) and (l), each of the aforementioned qualified production categories shall constitute separate, individual qualified productions; and

     (2)  Does not include:

          (A)  News;

          (B)  Public affairs programs;

          (C)  Non-national magazine or talk shows;

          (D)  Televised sporting events or activities;

          (E)  Productions that solicit funds;

          (F)  Productions produced primarily for industrial, corporate, institutional, or other private purposes; and

          (G)  Productions that include any material or performance prohibited by chapter 712.

     "Qualified production costs" means the costs incurred by a qualified production within the State that are subject to the general excise tax under chapter 237 at the highest rate of tax or income tax under this chapter if the costs are not subject to general excise tax and that have not been financed by any investments for which a credit was or will be claimed pursuant to section 235-110.9.  [Qualified production costs include] "Qualified production costs" includes but [are] is not limited to:

     (1)  Costs incurred during preproduction such as location scouting and related services;

     (2)  Costs of set construction and operations, purchases or rentals of wardrobe, props, accessories, food, office supplies, transportation, equipment, and related services;

     (3)  Wages or salaries of cast, crew, and musicians;

     (4)  Costs of photography, sound synchronization, lighting, and related services;

     (5)  Costs of editing, visual effects, music, other post-production, and related services;

     (6)  Rentals and fees for use of local facilities and locations, including rentals and fees for use of state and county facilities and locations that are not subject to general excise tax under chapter 237 or income tax under this chapter;

     (7)  Rentals of vehicles and lodging for cast and crew;

     (8)  Airfare for flights to or from Hawaii, and interisland flights;

     (9)  Insurance and bonding;

    (10)  Shipping of equipment and supplies to or from Hawaii, and interisland shipments; and

    (11)  Other direct production costs specified by the department in consultation with the department of business, economic development, and tourism;

provided that any government-imposed fines, penalties, or interest that are incurred by a qualified production within the State shall not be "qualified production costs".  "Qualified production costs" does not include any costs funded by any grant, forgivable loan, or other amounts not included in gross income for purposes of this chapter.

     "Streaming platform" means an online provider of media content that delivers the content via internet connection to the subscriber's computer, television, or mobile device."

     SECTION 2.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 3.  This Act, upon its approval, shall apply to taxable years beginning after December 31, 2025; provided that on January 1, 2033, this Act shall be repealed to coincide with the repeal date of Act 88, Session Laws of Hawaii 2006, as amended by Act 89, Session Laws of Hawaii 2013, as amended by Act 143, Session Laws of Hawaii 2017, as amended by Act 217, Session Laws of Hawaii 2022, and section 235‑17, Hawaii Revised Statutes, shall be reenacted in the form in which it read on the day before the effective date of Act 88, Session Laws of Hawaii 2006.

 

INTRODUCED BY:

_____________________________

 

 

 

 

Report Title:

Motion Picture, Digital Media, and Film Production Income Tax Credit; Commercial; Advertisement; Internet-only Distribution; Broadcast and Streaming Platforms

 

Description:

Makes broadcast and streaming platform productions and commercial advertisement productions with Internet-only distribution eligible to receive the Motion Picture, Digital Media, and Film Production Income Tax Credit.

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.