SB 454: RELATING TO THE RENTAL MOTOR VEHICLE SURCHARGE TAX.
- Session Year: 2025-2026
- House: Senate
- Latest Version Date: 2025-02-13
Current Status:
Failed
(2025-12-08: Carried over to 2026 Regular Session.)
Introduced
In Committee
First Chamber
In Committee
Second Chamber
Final Decking
Enacted
Requires the rental motor vehicle surcharge tax to be pro-rated if the vehicle is rented or leased for a portion of the day. Effective 7/1/2050. (SD1)
Requires the rental motor vehicle surcharge tax to be pro-rated if the vehicle is rented or leased for a portion of the day.
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THE SENATE |
S.B. NO. |
454 |
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THIRTY-THIRD LEGISLATURE, 2025 |
S.D. 1 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
RELATING TO THE RENTAL MOTOR VEHICLE SURCHARGE TAX.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 251-2, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) There is levied and shall be assessed and collected each month a rental motor vehicle surcharge tax of $5 a day, or any portion of a day that a rental motor vehicle is rented or leased. When a rental motor vehicle is rented or leased for a portion of a day, the tax under this section shall be assessed at a rate of $0.25 per half-hour, or any portion of a half‑hour, that a rental motor vehicle is rented or leased; provided that for each rental of six hours or more, the tax shall be assessed at the full rate specified in this section. Beginning January 1, 2022, and each subsequent year on January 1 until December 31, 2027, the rental motor vehicle surcharge tax shall increase by $0.50. The rental motor vehicle surcharge tax shall be levied upon the lessor; provided that the tax shall not be levied on the lessor if:
(1) The lessor is renting the vehicle to replace a vehicle of the lessee that:
(A) Is being repaired; or
(B) Has been stolen and is unrecovered or will not be repaired due to a total loss of the vehicle; and
(2) A record of the repair order, the stolen vehicle record, or total loss vehicle claim for the vehicle is retained either by the lessor for two years for verification purposes or by a motor vehicle repair dealer for two years as provided in section 437B-16.
In addition to the requirements imposed by section 251-4, a lessor shall disclose, to the department, the portion of the remittance attributed to the county in which the motor vehicle was operated under rental or lease. A peer-to-peer car-sharing program, as defined in chapter 279L, shall be subject to the tax imposed by this subsection and be subject to the other requirements of this chapter."
SECTION 2. New statutory material is underscored.
SECTION 3. This Act shall take effect on July 1, 2050.
Report Title:
Taxes; Rental Motor Vehicles
Description:
Requires the rental motor vehicle surcharge tax to be pro-rated if the vehicle is rented or leased for a portion of the day. Effective 7/1/2050. (SD1)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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THE SENATE |
S.B. NO. |
454 |
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THIRTY-THIRD LEGISLATURE, 2025 |
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STATE OF HAWAII |
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A BILL FOR AN ACT
Relating to the rental motor vehicle surcharge tax.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:
SECTION 1. Section 251-2, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a)
There is levied and shall be assessed and collected each month a rental
motor vehicle surcharge tax of $5 a day[, or any portion of a day that a];
provided that the tax shall be pro-rated for any rental motor vehicle that
is rented or leased[.] for a portion of that day. Beginning January 1, 2022, and each
subsequent year on January 1 until December 31, 2027, the rental motor vehicle
surcharge tax shall increase by $0.50[.] a day and shall be pro-rated
for any rental motor vehicle that is rented or leased for a portion of a day. The rental motor vehicle surcharge tax shall
be levied upon the lessor; provided that the tax shall not be levied on the
lessor if:
(1) The lessor is renting the vehicle to replace a vehicle of the lessee that:
(A) Is being repaired; or
(B) Has been stolen and is unrecovered or will not be repaired due to a total loss of the vehicle; and
(2) A record of the repair order, the stolen vehicle record, or total loss vehicle claim for the vehicle is retained either by the lessor for two years for verification purposes or by a motor vehicle repair dealer for two years as provided in section 437B-16.
In addition to the requirements imposed by section 251-4, a lessor shall disclose, to the department, the portion of the remittance attributed to the county in which the motor vehicle was operated under rental or lease. A peer-to-peer car-sharing program, as defined in chapter 279L, shall be subject to the tax imposed by this subsection and be subject to the other requirements of this chapter."
SECTION 2. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 3. This Act shall take effect upon its approval.
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INTRODUCED BY: |
_____________________________ |
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Report Title:
Taxes; Rental Motor Vehicles
Description:
Requires the rental motor vehicle surcharge tax to be pro-rated if the vehicle is rented or leased for a portion of the day.
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.
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Date
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Status
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| Dec 8, 2025 | Carried over to 2026 Regular Session. |
| Feb 14, 2025 | Report adopted; Passed Second Reading, as amended (SD 1) and referred to WAM. |
| Feb 14, 2025 | Reported from CPN/TCA (Stand. Com. Rep. No. 510) with recommendation of passage on Second Reading, as amended (SD 1) and referral to WAM. |
| Feb 7, 2025 | The committee(s) on TCA recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in TCA were as follows: 3 Aye(s): Senator(s) Lee, C., Elefante, Kanuha; Aye(s) with reservations: none ; 1 No(es): Senator(s) DeCorte; and 1 Excused: Senator(s) Inouye. |
| Feb 7, 2025 | The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS. The votes in CPN were as follows: 4 Aye(s): Senator(s) Keohokalole, Fukunaga, Richards; Aye(s) with reservations: Senator(s) McKelvey ; 1 No(es): Senator(s) Awa; and 0 Excused: none. |
| Jan 31, 2025 | The committee(s) on CPN/TCA has scheduled a public hearing on 02-07-25 9:45AM; Conference Room 229 & Videoconference. |
| Jan 21, 2025 | Referred to CPN/TCA, WAM. |
| Jan 16, 2025 | Passed First Reading. |
| Jan 16, 2025 | Introduced. |
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Date
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Description
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Location
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Votes
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| Feb 7, 2025 | The committee(s) on TCA recommend(s) that the measure be PASSED, WITH AMENDMENTS | Senate Standing Committee on Transportation and Culture and the Arts |
Passed |
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| Feb 7, 2025 | The committee(s) on CPN recommend(s) that the measure be PASSED, WITH AMENDMENTS | Senate Standing Committee on Commerce and Consumer Protection |
Passed |
This list shows positions taken on this bill by organizations on the date displayed, which is linked to the original source.
Positions by individuals are not included.
STAND. COM. REP. NO. 510
Honolulu, Hawaii
RE: S.B. No. 454
S.D. 1
Honorable Ronald D. Kouchi
President of the Senate
Thirty-Third State Legislature
Regular Session of 2025
State of Hawaii
Sir:
Your Committees on Commerce and Consumer Protection and Transportation and Culture and the Arts, to which was referred S.B. No. 454 entitled:
"A BILL FOR AN ACT RELATING TO THE RENTAL MOTOR VEHICLE SURCHARGE TAX,"
beg leave to report as follows:
The purpose and intent of this measure is to require the rental motor vehicle surcharge tax to be pro-rated if the vehicle is rented or leased for a portion of the day.
Your Committees received comments on this measure from the Department of Taxation, Enterprise Mobility, and Tax Foundation of Hawaii.
Your Committees find that this measure ensures the tax assessed on a rental motor vehicle that is rented or leased for a portion of a day is assessed fairly.
Your Committees acknowledge the testimony of the Department of Taxation that modeling language in this measure on existing law would allow the Department to implement this measure more effectively.
Accordingly, your Committees have amended this measure by:
(1) Clarifying that the pro-rated tax shall be assessed at a rate of $0.25 per half hour, or any portion of a half hour that the vehicle is rented; provided that a vehicle that is rented for six hours or more shall be assessed the full rate;
(2) Inserting an effective date of July 1, 2050, to encourage further discussion; and
(3) Making a technical, nonsubstantive amendment for the purposes of clarity and consistency.
As affirmed by the records of votes of the members of your Committees on Commerce and Consumer Protection and Transportation and Culture and the Arts that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 454, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 454, S.D. 1, and be referred to your Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committees on Commerce and Consumer Protection and Transportation and Culture and the Arts,
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________________________________ CHRIS LEE, Chair |
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________________________________ JARRETT KEOHOKALOLE, Chair |
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Date
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Testimony PDF
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| Feb 7, 2025 | SB454_TESTIMONY_CPN-TCA_02-07-25_.PDF |
Bill Author
Bill Co-Author(s):