STATE LAWMAKERS REACH AGREEMENT TO PRESERVE PROMISED INCOME TAX RELIEF FOR WORKING FAMILIES

HONOLULU - The Hawaiʻi State Legislature reached an agreement on Senate Bill 3125, SD1, HD1, on Wednesday evening, April 28, 2026, ensuring that previously enacted income tax relief will remain in place for working families across the state.

The final version of SB3125 SD1, HD1, CD 1 maintains the income tax cuts passed in 2024 for joint filers earning under $350,000, heads of household under $262,500, and single filers under $175,000, preserving critical financial relief for our working and middle-income households.

The agreement also does not include the proposed additional 1% increase on the top three income tax brackets, helping protect many local small business owners who file as individuals and supporting Hawaiʻi’s broader economy.

Federal funding cuts have created economic uncertainty, resulting in lower general fund tax revenues for the state.

Lawmakers worked through conference committee negotiations to reconcile differences between the House and Senate versions of the measure. Throughout the process, the Senate remained committed to preserving income tax relief for 90% of our local families.

From day one, Senate Ways and Means Committee Chair Donovan M. Dela Cruz emphasized the importance of preserving the full tax relief package.

“Affordability for local families remains a top priority for the Senate. Despite federal funding cuts affecting our budget, we are standing by our commitment to the people by preserving and continuing the promised tax relief,” said Senator Donovan M. Dela Cruz, Chair of the Senate Committee on Ways and Means (D – 17, portion of Mililani, Mililani Mauka, portion of Waipiʻo Acres, Launani Valley, Wahiawā, Whitmore Village).

“Preserving this tax relief means keeping our promise to Hawaiʻi’s working families. At a time when the cost of living continues to challenge so many households, maintaining these income tax cuts will help families keep more of what they earn and provide greater financial stability. I appreciate the collaboration that made this agreement possible while protecting essential services for our communities,” said Senator Sharon Y. Moriwaki, Vice Chair of the Senate Committee on Ways and Means (D – 12, Waikīkī, Ala Moana, Kakaʻako, McCully).

“Families in my district and across Hawaiʻi are feeling the pressure of higher everyday costs, from groceries to housing. Preserving this tax relief is the right decision because it puts money back into the pockets of local residents who need it most. This agreement reflects our commitment to supporting working families while maintaining a responsible path forward for the State,” said Senator Kurt Fevella (D – 20, ʻEwa Beach, Ocean Pointe, ʻEwa by Gentry, Iroquois Point, portion of ʻEwa Villages).

The agreement reached late this evening reflects a shared commitment to protecting local families from rising costs and ensuring the tax relief package delivers its original intent.

The agreement provides the State with a strong financial base. HB1800, the State budget bill, will still need to be discussed to ensure that the State has the funding necessary to provide core services to our residents.

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