Hawaii legislation · 2026 Regular Session
Hawaii SB2881: Relating to State Income Tax.
Status: Signed into law, June 9, 2026
Provides that taxable income subject to reporting as distribution on Internal Revenue Service Form 1099-R may be subject to withholding at the taxpayer's election. Requires the Department of Taxation to adopt rules and prescribe forms. Applicable to taxable years beginning after 12/31/2026.
What the bill says
A bill for an act relating to state income tax.
From the enrolled text:
A BILL FOR AN ACT RELATING TO STATE INCOME TAX. SECTION 1. The legislature finds that existing law does not address the withholding of state income tax from distributions subject to reporting on Internal Revenue Service Form 1099-R. The lack of clear withholding guidelines in statute limits the department of taxation's ability to collect state income taxes efficiently and may result in taxpayers owing large sums at the end of the year, creating unnecessary compliance burdens. The legislature further finds that allowing voluntary withholding of taxable distributions subject to reporting on Internal Revenue Service Form 1099-R, including individual retirement arrangements and tax-deferred annuities, would improve tax administration, reduce taxpayer risk of underpayment, and enhance the State's ability to collect revenue in a timely and predictable manner. Accordingly, the purpose of this Act is to provide for voluntary withholding of state income tax from taxable income SB2881 GDI LRB 26-1362.docx lllliOMIIIIIIIIIHIilll Page 2 S.B. NO. C.D. subject to reporting as a distribution on Internal Revenue Service Form 1099-R. SECTION 2. Chapter 235, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows: "§235- Voluntary withholding of tax for distributions reported on Form 1099-R. (a) A taxpayer may elect to have any taxable income received by the taxpayer that is subject to reporting …
Sponsors
- Donna Kim (D, 14) · primary sponsor
- Stanley Chang (D, 9)
- Lamosao, Rachele (D, 19)
- Angus McKelvey (D, 6)
Latest actions
- : Act 118, on 06/08/2026 (Gov. Msg. No. 1218).
- : Act 118, 06/08/2026 (Gov. Msg. No. 1218).
- : Enrolled to Governor.
- : Received notice of passage on Final Reading in House (Hse. Com. No. 888).
- : Received notice of Final Reading (Sen. Com. No. 816).
- : Passed Final Reading as amended in CD 1 with none voting aye with reservations; none voting no (0) and none excused (0).
- : Passed Final Reading, as amended (CD 1). Ayes, 25; Aye(s) with reservations: none . 0 No(es): none. 0 Excused: none.
- : Forty-eight (48) hours notice Wednesday, 05-06-26.
- : Reported from Conference Committee (Conf Com. Rep. No. 109-26) as amended in (CD 1).
- : 48 Hrs. Notice (as amended CD 1) 05-06-26.
Votes
- Passed Final Reading, as amended (CD 1) (May 6, 2026): 25 yea, 0 nay, passed
- Final Reading as amended in CD 1 with none voting aye with reservations; none voting no (0) and none excused (0) (May 6, 2026): 51 yea, 0 nay, passed
- none. (April 30, 2026): 3 yea, 0 nay, passed
- Conference Committee Vote (April 30, 2026): 3 yea, 0 nay, passed
- Third Reading with none voting aye with reservations; none voting no (0) and none excused (0) (April 14, 2026): 51 yea, 0 nay, passed
- Second Reading as amended in HD 1; placed on the calendar for Third Reading with none voting aye with reservations; none voting no (0) and Representative(s) Cochran excused (1) (April 9, 2026): 50 yea, 0 nay, passed
Subjects: Report, State Income Tax, Rules
Common questions
- What is SB2881?
- SB2881 is a bill in the Hawaii Legislature (2026 Regular Session): Relating to State Income Tax.
- What does SB2881 do?
- In its own words: A bill for an act relating to state income tax.
- What is the status of SB2881?
- Signed into law as of June 9, 2026. Latest action: Act 118, on 06/08/2026 (Gov. Msg. No. 1218). (June 9, 2026).
- Who sponsored SB2881?
- Donna Kim (D, 14), with 3 co-sponsors.
- Where is the official record for SB2881?
- On the Hawaii Legislature website: https://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=SB&billnumber=2881&year=2026
Source: official Hawaii record. Tracked by Delilah, AI for legislation across all 50 states and Congress.