STAND. COM. REP. NO. 776-26

Honolulu, Hawaii

, 2026

RE: H.B. No. 2590

H.D. 1

Honorable Nadine K. Nakamura

Speaker, House of Representatives

Thirty-Third State Legislature

Regular Session of 2026

State of Hawaii

Madame:

Your Committee on Finance, to which was referred H.B. No. 2590, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose of this measure is to:

(1) Impose the manufacturing general excise tax rate on motion picture, digital media, and film productions and repeal the provision in the definition of "qualified production costs" that applied the term to mean costs incurred that are subject to the highest general excise tax rate;

(2) Exempt from the general excise tax certain amounts received by a motion picture project employer from a client company equal to amounts that are disbursed by the motion picture project employer for employee wages, salaries, payroll taxes, insurance premiums, and employment benefits and payments to loan-out companies; and

(3) Require persons making payment to a loan-out company and claiming the Motion Picture, Digital Media, and Film Production Tax Credit to deduct and withhold an amount exceeding the amount actually due for all payments made to the loan-out company for services performed in the State.

Your Committee received testimony in support of this measure from the Creative Industries Division of the Department of Business, Economic Development, and Tourism; Motion Picture Association; Hawaii Teamsters Local 996; SAG‑AFTRA Hawaiʻi Local; Hawaiʻi Film Alliance; Island Film Group; ʻOhina Labs; Hawaiʻi Media Inc.; and numerous individuals. Your Committee received comments on this measure from the Department of Taxation; Tax Foundation of Hawaiʻi; and one individual.

As affirmed by the record of votes of the members of your Committee on Finance that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2590, H.D. 1, and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Finance,

____________________________

CHRIS TODD, Chair