Hawaii Senate President Donna Kim and House Finance Committee Chairwoman Sylvia Luke have separately introduced bills to remove a long-standing tax break for real estate companies that own lucrative properties in Hawaii.

The measures, S.B. 118 and H.B. 82, would get rid of the dividends paid deduction for real estate investment trusts (REITs) in Hawaii. Currently REITs, which own 291 properties in Hawaii worth more than $13 billion, don’t have to pay state corporate income taxes as long as they pass on their earnings to shareholders.

The tax break exists at both the state and federal level to encourage average people to invest in income-producing real estate.

But in Hawaii, that often means that out-of-state shareholders pay income taxes in their respective states and countries and the State of Hawaii misses out on revenue from REIT-owned property such as Ala Moana Center.

For a more in-depth look at the subject, read A Multimillion Dollar Tax Loophole Bigger Than Ala Moana Center.

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