HB 1267: RELATING TO TAXATION.

A BILL FOR AN ACT

relating to taxation.

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

     SECTION 1.  The legislature finds that the State is experiencing a growing mental health and housing crisis.  In the aftermath of the August 8, 2023, wildfires on Maui, these concerns are increasingly more prevalent.  An estimated two thousand two hundred homes, apartments, and structures were destroyed, leading to what has been termed a dire mental health crisis.  Additionally, many landlords on Maui will not rent to tenants with pets, leaving Lahaina fire victims with pets struggling to find housing.

     The legislature additionally finds that the State's mental health and housing concerns may be addressed through support dedicated to human-animal companionship.  To this end, human-animal companionship has been linked to a reduction of feelings of stress, anxiety, depression, and loneliness.  In addition to this, human-animal companionship has also been known to improve cardiovascular and heart health as well as immune system functioning.  These combined benefits have led pet owners to go to the doctor an estimated fifteen per cent less than non-pet owners.

     An increase in pet-friendly housing would also benefit the State financially as it would reduce medicaid costs and costs incurred from surrendered and abandoned pets, alleviate homelessness, and aid mental health.

     The purpose of this Act is to establish a pilot program that would grant participating landlords a certain general excise tax exemption for each unit they rent to a long-term tenant with a pet.

     SECTION 2.  (a)  The department of taxation shall establish a one-year pilot program that would grant participating landlords a certain general excise tax exemption for the gross income derived from each unit they rent to a long-term tenant with a pet.

     (b)  Prior to the implementation of the pilot program, the department of taxation shall conduct a general survey to prospective landlords and tenants statewide to evaluate interest in the pilot program; provided that the survey shall not take longer than four months.

     (c)  Under the pilot program,      per cent of the gross income derived from rental units that are rented by participating landlords to long-term tenants with a pet shall be exempted from the measure of taxes imposed by chapter 237, Hawaii Revised Statutes.

     (d)  Landlords participating in the pilot program shall register with the department of taxation and provide documentation that the department deems necessary to verify that the landlord qualifies to participate in the pilot program; provided that the rental lease agreement is for a minimum of six months during the duration of the pilot program.

     (e)  The director of taxation shall prepare forms as may be necessary for taxpayers to participate in the pilot program.  The director may also adopt rules necessary to effectuate the purposes of this Act.

     (f)  The department of taxation shall submit:

     (1)  A preliminary report of its survey results and interest in the pilot program, including any proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2026; and

     (2)  A final report of the efficacy and net cost savings to the State, including any recommendations and proposed legislation, to the legislature no later than twenty days prior to the convening of the regular session of 2027.

     (g)  For the purposes of this section, "pet" means a "pet animal" as that term is defined in section 711-1100, Hawaii Revised Statutes.

     SECTION 3.  This Act shall take effect upon its approval.

Report Title:

Pets; Tenant; Residential Landlord; Pilot Program; General Excise Tax Exemption; Department of Taxation

Description:

Requires the Department of Taxation to establish a pilot program that would grant participating landlords a certain general excise tax exemption for each unit they rent to a long-term tenant with a pet.  Requires the Department of Taxation to submit reports to the Legislature.

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