CONFERENCE COMMITTEE REP. NO. 109-26

Honolulu, Hawaii

, 2026

RE: S.B. No. 2881

S.D. 1

H.D. 1

C.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Sir and Madam:

Your Committee on Conference on the disagreeing vote of the Senate to the amendments proposed by the House of Representatives in S.B. No. 2881, S.D. 1, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO STATE INCOME TAX,"

having met, and after full and free discussion, has agreed to recommend and does recommend to the respective Houses the final passage of this bill in an amended form.

The purpose and intent of this measure is to facilitate the efficient collection of state income taxes from taxpayers who receive income that is subject to reporting on Internal Revenue Service Form 1099‑R.

More specifically, the measure:

(1) Provides that a taxpayer may elect to make that income subject to state income tax withholding; and

(2) Requires the Department of Taxation to adopt applicable rules pursuant to chapter 91, Hawaii Revised Statutes, to administer the voluntary withholdings.

The legislature finds that authorizing the voluntary withholding of taxable distributions subject to reporting on Internal Revenue Service Form 1099-R, including income from individual retirement arrangements and tax-deferred annuities, would improve the State's tax administration, reduce taxpayers' risk of underpayment, and enhance the State's ability to collect revenue in a timely and consistent manner.

Your Committee has amended this measure by making the measure effective upon its approval.

As affirmed by the record of votes of the managers of your Committee on Conference that is attached to this report, your Committee on Conference is in accord with the intent and purpose of S.B. No. 2881, S.D. 1, H.D. 1, as amended herein, and recommends that it pass Final Reading in the form attached hereto as S.B. No. 2881, S.D. 1, H.D. 1, C.D. 1.

Respectfully submitted on behalf of the managers:

ON THE PART OF THE HOUSE

ON THE PART OF THE SENATE

____________________________ JENNA TAKENOUCHI Chair

____________________________ DONNA MERCADO KIM Chair