By Aman Jain. Originally published at ValueWalk.
Record inflation and rising fuel prices continue to push states to send relief payments to residents. Many states are already sending, or are in the process of sending, financial help to residents, and the latest state to do so is Hawaii. The stimulus checks from Hawaii could amount to up to $300. Moreover, these stimulus checks are targeted toward lower-income households.
Stimulus Checks From Hawaii: Who Would Get Them?
A couple of weeks ago, Hawaii lawmakers approved a tax rebate bill, called Senate Bill 514, which aims to give extra cash to lower-income households. The bill proposes giving stimulus checks from Hawaii of up to $100 to tax filers with income more than $100,000 annually and $300 to those with income less than that.
Q1 2022 hedge fund letters, conferences and more
“I’m glad that legislators are thinking of giving some of the surplus money back to taxpayers. It’s likely to be a one-time shot in the arm, but I think folks who have been suffering through the pandemic will be grateful for the help,” said the president of the Tax Foundation of Hawaii, Tom Yamachika.
Additionally, the rebate would go out to each dependent. This means the amount of the stimulus check that one would get depends on the size of the household. These stimulus checks from Hawaii would benefit taxpayers who filed their tax returns in Hawaii for 2021. The stimulus checks would cost the state about $250 million.
Along with sending stimulus checks from Hawaii, Senate Bill 514 also sets aside $500 million for the emergency and budget reserve fund and $300 million for the pension accumulation fund. It is the first substantive state tax refund or credit of its kind since 2007.
First Substantive State Tax Refund Since 2007
Gov. David Ige first proposed the tax rebate earlier this year. The lawmakers, however, didn’t give much response to it initially. Now, the record state tax collections due to the tourism industry bouncing back and the economy recovering rapidly, have pushed lawmakers to revisit the idea of giving a tax rebate.
Previously, it was mandatory for the state to give tax rebates whenever the state runs into large surpluses. In recent years, however, the tax rebates have become less frequent.
In 1978, the state constitutional convention drafted an amendment that made it mandatory to send tax rebates or credits every time the state witnesses a general treasury surplus for two consecutive years. Lawmakers approved the credits of up to $160 in 2007, but the lawmakers generally go for $1-per-person credit whenever the refund requirement is triggered.
In 2010, voters approved another amendment that made changes to the tax credit requirement. The new amendment allowed authorities to put extra money in the state’s budget reserve or “rainy day” fund, rather than giving money back to the taxpayers. As per the Tax Foundation, there haven’t been any credits under the 1978 constitutional requirement since then.
Updated on
Sign up for ValueWalk’s free newsletter here.
