The following testimony was submitted by the Grassroot Institute of Hawaii for consideration by the House Committee on Finance on March 3, 2026
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March 3, 2026, 10 a.m.
Hawaii State Capitol
Conference Room 308 and Videoconference
To: House Committee on Finance
Rep. Chris Todd, Chair
Rep. Jenna Takenouchi, Vice Chair
From: Grassroot Institute of Hawaii
Ted Kefalas, Director of Strategic Campaigns
RE: TESTIMONY OPPOSING HB1918 HD1 — RELATING TO TAXATION
Aloha Chair, Vice Chair and other Committee members,
The Grassroot Institute of Hawaii opposes HB1918 HD1, which would impose a conveyance tax on the transfer of a controlling interest of an entity with real property located in the state.
Put simply, this bill seeks to expand the scope of the conveyance tax to include business transactions, presumably in the hopes of generating tax revenues.
Assuming that the headaches associated with administration and collection of this tax are not enough to give the Committee pause, there is reason to be concerned about the effect it could have on Hawaii businesses and real estate.
Even when applied directly, transfer taxes can have a negative impact on the economy. A report by the Sage Policy Group noted that high transfer taxes can “lead to decreases in population, real incomes, real estate transactions, investment in structures, and quality of the built environment.”[1]
The same report added that transfer taxes are not a reliable source of tax revenues, and are particularly volatile in areas with especially high tax rates.[2]
In the case of this bill, those negative features of the conveyance tax are compounded by the fact that it would create complications and disincentives for the transfer or restructuring of local businesses. Thus, it would act as yet another burden on Hawaii businesses, discourage investment and hinder economic growth.
If the goal is to grow Hawaii’s economy, then businesses need a break from new taxes, tax increases, fees and surcharges. This is not the time to make Hawaii a more expensive place to live and do business.
Thank you for the opportunity to testify.
Ted Kefalas
Director of Strategic Campaigns
Grassroot Institute of Hawaii
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[1] “The Unintended Consequences of Excessive Transfer Taxes,” Sage Policy Group, Inc. on behalf of the Community Coalition for Jobs and Housing, June 2022, p. 3.
[2] “The Unintended Consequences of Excessive Transfer Taxes,” p. 2.
