republic-os/legislation/us/states/hi/2024/sb-2725.md

---
type: "Bill"
title: "RELATING TO PASS-THROUGH ENTITY TAXATION."
description: "For taxable years beginning after 12/31/2023, adds a definition for \"qualified member\" and repeals the definitions for \"direct member\" and \"indirect member\" as used in the State's passthrough entity taxation election law. Amends the passthrough entity level tax rate to be the sum of all qualified member's distributive shares and guaranteed payments of Hawaiʻi taxable income, as calculated under chapter 235, HRS, multiplied by 9%. For pass-through entities electing to pay Hawaiʻi income taxes at the entity level, allows certain qualified members entitled to a tax credit to use the credit against the member's net income tax liability in subsequent years until exhausted. (CD1)"
jurisdiction: "us/states/hi"
legislature: "Hawaii Legislature"
session: "2024"
identifier: "SB 2725"
citation: "Hawaii SB 2725 (2024)"
classification: ["bill"]
subjects: ["Partnerships", "Pass-Through Entities", "Qualified Members", "S Corporations", "Taxation"]
status: "enacted"
primary_sponsors: ["FEVELLA", "HASHIMOTO", "MCKELVEY", "MORIWAKI"]
version_count: 3
action_count: 38
vote_count: 4
first_action: "2024-01-19"
last_action: "2024-06-20"
source: "openstates"
source_identifier: "ocd-bill/5f1464ca-fea7-4872-bfbe-b214bacdac1f"
source_url: "https://capitol.hawaii.gov/session/archives/measure_indiv_Archives.aspx?billtype=SB&billnumber=2725&year=2024"
source_hash: "5d83335564091f868036a86b5eaa624ff7de863cd05264bf00eafe9b6cb1d3c3"
vintage: "2026-07-01"
source_snapshot: "https://data.openstates.org/daily/2026-07-01/public.pgdump"
retrieved_at: "2026-07-06"
confidence: "reported"
tags: ["legislation", "bill", "us-hi"]
---

# Hawaii SB 2725 (2024) — RELATING TO PASS-THROUGH ENTITY TAXATION.

For taxable years beginning after 12/31/2023, adds a definition for "qualified member" and repeals the definitions for "direct member" and "indirect member" as used in the State's passthrough entity taxation election law. Amends the passthrough entity level tax rate to be the sum of all qualified member's distributive shares and guaranteed payments of Hawaiʻi taxable income, as calculated under chapter 235, HRS, multiplied by 9%. For pass-through entities electing to pay Hawaiʻi income taxes at the entity level, allows certain qualified members entitled to a tax credit to use the credit against the member's net income tax liability in subsequent years until exhausted. (CD1)

## Version chain

The bill's text revisions, in order — the diff chain from filing to enrollment.

1. **SB2725** (committee substitute) — [source](https://capitol.hawaii.gov/sessions/session2024/bills/SB2725_.HTM)
2. **SB2725_CD1** (committee substitute) — [source](https://capitol.hawaii.gov/sessions/session2024/bills/SB2725_CD1_.HTM)
3. **SB2725_HD1** (committee substitute) — [source](https://capitol.hawaii.gov/sessions/session2024/bills/SB2725_HD1_.HTM)

## Votes

- The committee(s) on WAM recommend(s) that the measure be PASSED, UNAMENDED. — **12–0** (pass) · upper
- The committee on FIN recommend that the measure be PASSED, WITH AMENDMENTS. — **14–0** (pass) · lower
- The Conference committee recommends that the measure be PASSED, WITH AMENDMENTS. — **3–0** (pass) · upper
- The Conference Committee recommends that the measure be Passed, with Amendments. — **4–0** (pass) · lower

## Sponsors

- FEVELLA — primary (person)
- HASHIMOTO — primary (person)
- MCKELVEY — primary (person)
- MORIWAKI — primary (person)
- Kidani — cosponsor (person)

## Timeline

The legislative action history — every referral, reading, and vote.

- **2024-06-20** Act 050, 06/19/2024 (Gov. Msg. No. 1150). `became-law`
- **2024-06-20** Act 050, on 06/19/2024 (Gov. Msg. No. 1150). `became-law`
- **2024-05-02** Enrolled to Governor. `executive-receipt`
- **2024-05-03** Received notice of passage on Final Reading in House (Hse. Com. No. 830). `receipt`
- **2024-05-01** Received notice of Final Reading (Sen. Com. No. 798). `receipt`
- **2024-05-01** Passed Final Reading as amended in CD 1 with none voting aye with reservations; Representative(s) Cochran, Hussey-Burdick, Kapela, Perruso, Poepoe voting no (5) and none excused (0). `passage`
- **2024-05-01** Passed Final Reading, as amended (CD 1). Ayes, 25; Aye(s) with reservations: none. Noes, 0 (none). Excused, 0 (none). `passage`
- **2024-04-26** Forty-eight (48) hours notice Wednesday, 05-01-24.
- **2024-04-26** Reported from Conference Committee (Conf Com. Rep. No. 115-24) as amended in (CD 1).
- **2024-04-26** 48 Hrs. Notice (as amended CD 1) 05-01-24.
- **2024-04-26** Reported from Conference Committee as amended CD 1 (Conf. Com. Rep. No. 115-24).
- **2024-04-25** The Conference Committee recommends that the measure be Passed, with Amendments. The votes were as follows: 4 Ayes: Representative(s) Kitagawa, Chun, Garrett, Alcos; Ayes with reservations: none; 0 Noes: none; and 0 Excused: none.
- **2024-04-25** The Conference committee recommends that the measure be PASSED, WITH AMENDMENTS. The votes of the Senate Conference Managers were as follows: 3 Aye(s): Senator(s) Moriwaki, Wakai, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 0 Excused: none. `committee-passage-favorable`
- **2024-04-24** Conference committee meeting scheduled for 04-25-24 1:00PM; Conference Room 309.
- **2024-04-18** Received notice of Senate conferees (Sen. Com. No. 698). `receipt`
- **2024-04-18** Senate Conferees Appointed: Moriwaki Chair; Wakai, Fevella.
- **2024-04-18** Received notice of appointment of House conferees (Hse. Com. No. 759). `receipt`
- **2024-04-17** House Conferees Appointed: Kitagawa Chair; Chun, Garrett, Alcos.
- **2024-04-11** Received notice of disagreement (Sen. Com. No. 673). `receipt`
- **2024-04-11** Senate disagrees with House amendments. `amendment-failure`
- **2024-04-11** Received from House (Hse. Com. No. 708). `introduction, receipt`
- **2024-04-09** Passed Third Reading with Representative(s) Hussey-Burdick voting aye with reservations; Representative(s) Kapela, Perruso, Poepoe voting no (3) and none excused (0). Transmitted to Senate. `passage`
- **2024-04-05** Passed Second Reading as amended in HD 1; placed on the calendar for Third Reading with Representative(s) Amato, Belatti, Hussey-Burdick voting aye with reservations; Representative(s) Ganaden, Kapela, Perruso, Poepoe voting no (4) and Representative(s) Gates, Souza excused (2).
- **2024-04-05** Reported from FIN (Stand. Com. Rep. No. 1781-24) as amended in HD 1, recommending passage on Second Reading and placement on the calendar for Third Reading.
- **2024-04-03** The committee on FIN recommend that the measure be PASSED, WITH AMENDMENTS. The votes were as follows: 14 Ayes: Representative(s) Yamashita, Kitagawa, Aiu, Chun, Cochran, Garrett, Kahaloa, Kila, Kobayashi, Lamosao, Morikawa, Nishimoto, Poepoe, Takenouchi; Ayes with reservations: none; Noes: none; and 2 Excused: Representative(s) Alcos, Ward. `committee-passage-favorable`
- **2024-04-01** Bill scheduled to be heard by FIN on Wednesday, 04-03-24 2:15PM in House conference room 308 VIA VIDEOCONFERENCE.
- **2024-03-07** Referred to FIN, referral sheet 16 `referral-committee`
- **2024-03-07** Pass First Reading `reading-1`
- **2024-03-05** Received from Senate (Sen. Com. No. 185). `introduction, receipt`
- **2024-03-05** Passed Third Reading. Ayes, 25; Aye(s) with reservations: none . Noes, 0 (none). Excused, 0 (none). Transmitted to House. `passage`
- **2024-03-01** One Day Notice 03-05-24.
- **2024-03-01** Report adopted; Passed Second Reading. `reading-2, referral-committee`
- **2024-03-01** Reported from WAM (Stand. Com. Rep. No. 2845) with recommendation of passage on Second Reading and placement on the calendar for Third Reading.
- **2024-02-28** The committee(s) on WAM recommend(s) that the measure be PASSED, UNAMENDED. The votes in WAM were as follows: 12 Aye(s): Senator(s) Dela Cruz, Moriwaki, Aquino, DeCoite, Hashimoto, Inouye, Kanuha, Kidani, Kim, Lee, Wakai, Fevella; Aye(s) with reservations: none ; 0 No(es): none; and 1 Excused: Senator(s) Shimabukuro. `committee-passage-favorable`
- **2024-02-23** The committee(s) on WAM has scheduled a public hearing on 02-28-24 10:02AM; Conference Room 211 & Videoconference.
- **2024-01-24** Referred to WAM. `referral-committee`
- **2024-01-22** Passed First Reading. `reading-1`
- **2024-01-19** Introduced. `introduction`

## Source

OpenStates / OpenCivicData bulk snapshot [2026-07-01](https://data.openstates.org/daily/2026-07-01/public.pgdump); origin `ocd-bill/5f1464ca-fea7-4872-bfbe-b214bacdac1f`. Confidence: reported (aggregated from official Hawaii legislature records).