(T(Center Square) – Hawaii Gov. Josh Green’s plan to end the state’s food and drug tax isn’t ideal, but it won’t be easy, says Tax Executive Director Foundation of Hawaii.
The governor proposed eliminating the tax during his inaugural address, saying it would “make Hawaii more affordable for those struggling to live paycheck to paycheck.”
Lawmakers have not said whether they support Green’s plan.
“Legislators and special interests are used to certain revenues, so it will be difficult to do anything less,” Tom Yamachika, president of the Tax Foundation of Hawaii, told The Center Square. “Spending must be controlled.”
Senate President Scott Saiki and Senate President Ronald D. Kouchi did not return messages from The Center Square seeking comment. Legislature meets for the 2023 session on January 18.
Legislators’ silence doesn’t mean the proposal is hopeless, Yamachika said.
“Currently, the legislative leaders have not weighed in condemning the proposals, so there is an opportunity to pass,” said Yamachika. “The likelihood of passage will become clearer as the meeting continues.”
Low-income families have discounts on books, Yamachika said.
Food/excise refundable credit was the most used in 2020, according to a REPORT from the Hawaii Department of Revenue. The credit is available to taxpayers who have lived in Hawaii for at least nine months and have not been in jail or been incarcerated for a full year.
Residents who earned less than $50,000 a year and filed a certificate, head of household or widowed are entitled to the food tax. The eligibility limit for a single applicant is $30,000. Nearly 34%, or 29.6 million Hawaii taxpayers, used the credit in 2020, up from 28.35 million in 2022.
Hawaii’s income tax credit expires this year because it was not renewed by the legislature this year. Families can claim the equivalent of 20% of their federal co-workers. Tax credits were the second most popular for the 2020 tax year, with 64,430 filers claiming them. The state released $21.1 million in 2020 income tax claims and $18.1 million in the 2019 tax year, according to the report.
Other tax credits include one for low-income renters with an annual income of less than $30,000 and a credit for parents who purchase child restraint systems during the fiscal year, according to the Hawaii Department of Revenue.