HB2028

SECTION 1. The legislature finds that Labor Day is a federal holiday dedicated to recognizing the contributions of workers to the strength, prosperity, and well-being of the nation. The construction industry plays a vital role in the economic and infrastructural development of Hawaii. Construction workers often perform physically demanding and hazardous labor, contributing significantly to the State's growth. The legislature further finds that it is fitting that these workers be afforded a paid day of rest and recognition on Labor Day. However, the legislature also recognizes that imposing the cost of this paid holiday solely on private employers may create an undue financial burden. The legislature additionally finds that it is in the State's best interest to provide funding to compensate construction workers for the Labor Day holiday.

Therefore, the purpose of this Act is to establish a refundable tax credit for employers who provide a paid Labor Day holiday to construction workers.

SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§235- Paid Labor Day holiday for construction workers; tax credit. (a) As used in this section:

"Construction worker" means any individual employed in the construction industry, including but not limited to:

(1) Ironworkers;

(2) Plumbers;

(3) Carpenters;

(4) Electricians;

(5) Mason;

(6) Roofers;

(7) Laborers;

(8) Operators of construction equipment;

(9) Sheet-metal workers;

(10) Elevator workers;

(11) Heat and frost insulators and related workers;

(12) Bricklayers and related workers;

(13) Boiler makers;

(14) Painters, glaziers, floor layers, and tapers;

(15) Roofers, waterproofers, and related workers; and

(16) Any other worker whose primary duties involve on-site construction, alteration, or repair of buildings, structures, or infrastructure.

"Labor Day" means the Labor Day holiday recognized by the State in section 8-1.

(b) Notwithstanding any other provision of law to the contrary, there shall be allowed to each taxpayer that is subject to the tax imposed by this chapter and that employs construction workers a refundable paid Labor Day tax credit, which shall be deductible from the taxpayer's net income tax liability, if any, imposed by this chapter for the taxable year in which the credit is properly claimed.

(c) The taxpayer shall be eligible for the credit for each construction worker employed by the taxpayer for which the taxpayer provides a paid day off on Labor Day.

(d) The amount of the tax credit shall be calculated based on the construction worker's average daily wage for the four weeks preceding Labor Day for an eight-hour day for each construction worker employed by the taxpayer.

(e) If the paid Labor Day holiday tax credit allowed under subsection (b) exceeds the taxpayer's net income tax liability, the excess of credit over liability shall be refunded to the taxpayer; provided that no refunds or payment on account of the tax credit allowed by this section shall be made for amounts less than $1.

All claims for tax credits under this section, including any amended claims, shall be filed on or before the end of the twelfth month following the close of the taxable year for which the credits may be claimed. Failure to comply with the foregoing provision shall constitute a waiver of the right to claim the credit.

(f) This section shall not apply to construction workers employed by the State or any of its political subdivisions who are already entitled to paid holidays under applicable collective bargaining agreements or civil service rules.

(g) The director of taxation shall prepare any forms that may be necessary to claim a credit under this section. The director may also require the taxpayer to furnish information to ascertain the validity of the claim for credit made under this section. The director of taxation may adopt rules pursuant to chapter 91 to implement this section."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act, upon its approval, shall apply to taxable years beginning after December 31, 2025.

INTRODUCED BY:	_____________________________

HOUSE OF REPRESENTATIVES	H.B. NO.	2028
THIRTY-THIRD LEGISLATURE, 2026
STATE OF HAWAII