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05 February 2026

Hawaii proposes repeal of general excise tax exemption for receipts from most securities transactions

  • HB 1813 and SB 2920, introduced in Hawaii on January 23, 2026, aim to repeal the general excise tax exemption for most securities transactions.
  • The repeal would subject transaction fees from securities exchanges to Hawaii's 4% general excise tax, potentially increasing costs for consumers.
  • The bills also would repeal the exemptions for various exchange receipts, including membership dues and transaction fees from brokers.
 

Two bills (HB 1813 and SB 2920, the bills) have been introduced in the Hawaii legislature that would repeal the general excise tax (GET) exemption for receipts from most securities transactions under Haw. Rev. Stat. Section 237-24.5.

If enacted, the bills would repeal the GET for amounts received by exchanges1 from transaction fees charged to exchange members for:

  1. Sales or purchases of securities or products2
  2. Order book executions made for purposes of effecting transactions
  3. Trade processing performed by an exchange

The bills also would eliminate the exemption for membership dues, assessments, fines, service fees, listing and listing maintenance fees and certain other exchange receipts, as well as the exemption for sales of exchange memberships.

Additionally, the bills would eliminate the exemption for amounts received by exchange members for executing a securities or product transaction on an exchange, if the amounts are received from:

  1. Brokers or dealers registered with the Securities and Exchange Commission
  2. Futures commission merchants, brokers, or associates registered with the Commodities Futures Trading Commission or
  3. Similar individuals outside of the United States for executing a securities or product transaction on an exchange

HB 1813 is sponsored by Rep. Kyle Yamashita, who chairs the House Finance Committee. SB 2920 is sponsored by Sen. Donovan Dela Cruz, who chairs the Senate Ways and Means Committee.

Implications

The repeal of the exemptions would subject most exchange activity to Hawaii's 4% GET, plus applicable local GET (typically 0.5%). While the tax would not apply to gains from the sale of securities, the additional transaction costs may be passed on to consumers.

The proposed measures come as Hawaii is dealing with significant anticipated budget shortfalls resulting from reductions in federal funding to the state, which are expected to impact essential services. Governor Josh Green already has proposed a three-year pause to planned personal income tax cuts that were to take effect after 2027.

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Endnotes

1 "Exchange" is defined as any "exchange or board of trade … subject to regulation by the Securities and Exchange Commission or the Commodities Futures Trading Commission or an organization subject to similar regulation under the laws of a jurisdiction outside the United States." Haw. Rev. Stat. Section 237-24.5(b).

2 "Products" means contracts of sale of commodities for future delivery, futures contracts, options, calls, puts, and similar rights." Id.

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Contact Information

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State and Local Tax

Published by NTD’s Tax Technical Knowledge Services group; Chris DeZinno, legal editor

Document ID: 2026-0360

 

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