Hawaii offers a range of state-level incentives to stimulate business growth, foster innovation, and enhance job creation across various industries.  The state’s incentives focus on key sectors, including technology, renewable energy, tourism, and agriculture, all of which are vital to Hawaii’s economy.  Below are the primary incentive programs available to businesses in Hawaii.

Hawaii Research Tax Credit

Overview

The Hawaii Research Tax Credit aims to encourage businesses to invest in research and development activities within the state.  The program is designed to support technological advancements and innovation across industries.

Eligibility

• Businesses must conduct qualified R&D activities in Hawaii, which can include the development or improvement of products, processes, or software.

• Activities must align with specific scientific or technological research goals.

Incentive Value

• A credit of up to 20% of qualifying research expenses incurred in Hawaii.

• The maximum credit is $1 million per year, with unused credits able to be carried forward for up to 5 years.

Application Process

To apply, businesses must submit a claim to the Hawaii Department of Taxation (HDT), including documentation of R&D expenses and activities.

Hawaii High Technology Business Investment Tax Credit

Overview

The High Technology Business Investment Tax Credit is designed to attract investment into Hawaii’s growing technology sector by offering tax credits to qualified investors.

Eligibility

• Businesses must operate in high-tech industries, such as software development, biotechnology, or renewable energy.

• Investors must make equity investments in qualifying high-tech companies.

Incentive Value

• Tax credits of 100% of the equity investment in the qualifying business, up to $2 million per investor.

• These credits can be applied against Hawaii’s income tax and carried forward for up to 10 years.

Application Process

Investors and businesses must apply through the Hawaii Department of Business, Economic Development, and Tourism (DBEDT).  The department evaluates the investment and confirms eligibility.

Hawaii Renewable Energy Technologies Income Tax Credit

Overview

The Hawaii Renewable Energy Technologies Income Tax Credit incentivizes businesses to invest in renewable energy projects, such as solar, wind, and geothermal, to reduce dependence on fossil fuels and promote sustainable energy solutions.

Eligibility

• Businesses must invest in renewable energy systems, including solar photovoltaic systems, wind turbines, and energy storage systems.

• Systems must be installed and operational in Hawaii.

Incentive Value

• The credit can be up to 35% of the cost of purchasing and installing eligible renewable energy systems.

• For solar energy systems, businesses can receive credits of up to $5,000 for residential projects and $250,000 for commercial installations.

Application Process

Businesses must apply to HDT to claim the credit, providing documentation of the system installation and associated costs.

Hawaii Film and Digital Media Tax Credit

Overview

The Hawaii Film and Digital Media Tax Credit is designed to attract film, television, and digital media productions to the state by providing tax incentives to offset production costs.

Eligibility

• Productions must spend at least $200,000 on qualified expenses in Hawaii.

• Eligible expenses include labor costs, equipment rental, location fees, and post-production work.

Incentive Value

• A refundable tax credit of up to 20% of qualified production expenses, with an additional 5% for projects that use Hawaii-based labor and services.

• The total credit available can range from a few thousand dollars to several million dollars, depending on the scope of the production.

Application Process

Producers must apply to the Hawaii Film Office and HDT to receive approval and claim the credit.

Hawaii Income Tax Credit for Energy Conservation

Overview

Hawaii’s Income Tax Credit for Energy Conservation encourages businesses to invest in energy-efficient equipment and technology to reduce energy consumption and improve environmental sustainability.

Eligibility

• Businesses must install qualifying energy-efficient systems such as lighting, HVAC systems, and building insulation.

• The property must be located in Hawaii.

Incentive Value

• A credit of up to 35% of the cost of qualifying energy conservation measures.

• The credit can be applied against the business’s income tax liability for up to 3 years.

Application Process

Businesses must submit an application to HDT, providing details about the energy-efficient equipment and its installation.

Hawaii Motion Picture, Digital Media, and Film Production Income Tax Credit

Overview

The Motion Picture, Digital Media, and Film Production Income Tax Credit supports the development of the entertainment industry in Hawaii by offering tax credits to qualifying production companies.

Eligibility

• Productions must spend at least $200,000 on qualifying expenses within the state.

• Eligible costs include production labor, rental equipment, and other production-related expenses.

Incentive Value

• The tax credit is 20% of qualifying expenses, with a bonus 5% credit for productions that utilize local labor and resources.

• The maximum tax credit available is $15 million per year per production.

Application Process

Applications are submitted to the Hawaii Film Office, where production costs and spending are reviewed to ensure compliance with program guidelines.

Hawaii State and County Tax Exemptions for New and Expanding Businesses

Overview

This program offers various state and local tax exemptions to businesses that either relocate to Hawaii or expand operations within the state, with a focus on job creation and economic development.

Eligibility

• Businesses must create new jobs and invest in Hawaii’s economy by either expanding existing operations or establishing a new facility.

• Eligible industries include technology, manufacturing, and tourism.

Incentive Value

• Exemptions from property taxes, income taxes, and certain sales taxes.

• The value of these exemptions can vary depending on the size and scope of the business.

Application Process

Businesses must apply to DBEDT and submit a business plan detailing job creation and investment.

Hawaii Export Assistance Programs

Overview

Hawaii’s Export Assistance Programs help local businesses expand their markets by offering resources and support for international trade.

Eligibility

• Businesses must be based in Hawaii and engage in the production of goods or services that are eligible for export.

• The business must have a clear plan for entering international markets.

Incentive Value

• Assistance includes export financing, marketing support, and trade mission participation.

• Financial support can be used to cover travel costs, marketing materials, and participation in trade shows.

Application Process

Businesses apply to the DBEDT, which provides resources and guidance on how to access global markets.

Conclusion

Hawaii offers a variety of incentives aimed at promoting innovation, sustainability, and business growth across multiple industries.  From R&D tax credits and renewable energy incentives to support for the film industry and energy conservation, businesses in Hawaii can take advantage of these programs to enhance their operations.