Hawaii Senate Bill SB2375

Hawaii 2026 Regular Session

• Introduced: 1/21/26
• Refer: 1/26/26

Caption

Relating To Sustainable Aviation Fuel Tax Credit.

Impact

The enactment of SB2375 will amend Chapter 235 of the Hawaii Revised Statutes, specifically introducing a new section dedicated to the sustainable aviation fuel tax credit. Taxpayers distributing SAF within the state will benefit from financial relief off their net income tax liability, contingent upon the fuel meeting lifecycle greenhouse gas emissions reduction criteria. This provision is expected to foster an increase in safer fuel options across the aviation industry within Hawaii, with the goal of lowering overall emissions and thereby contributing positively to environmental efforts.

Summary

Senate Bill 2375 aims to establish a tax credit for the distribution of sustainable aviation fuel (SAF) in Hawaii. The bill recognizes the aviation sector's significant contribution to the state's carbon footprint and aims to encourage cleaner energy alternatives by incentivizing SAF production and distribution. The proposed tax credit is structured at $1 per gallon for sustainable aviation fuel sold, with potential increases based on further emissions reductions beyond the established thresholds. The state anticipates that this initiative will support both economic development and the advancement of climate goals, aiding Hawaii's efforts to combat climate change.

Contention

Despite the potential benefits, the bill may face scrutiny regarding its implications on state revenue and the feasibility of its implementation in practice. Critics may question the long-term sustainability of such tax credits, notably concerning whether the state can absorb lost tax revenues while providing significant credits—cap set at $20 million annually for all eligible taxpayers. Furthermore, the transparency measures, such as requiring reporting to ensure compliance, will need to be effectively managed to mitigate concerns related to potential misuse of the credits.