Hawaii Legislation Changes its General Excise Tax Treatment

We are pleased to share good news for productions filming or considering filming in Hawaii. Governor Josh Green has signed Senate Bill 2580 (SB 2580) into law, following passage by both the Hawaii House and Senate. This legislation will restore the General Excise Tax (GET) exemption for motion picture payroll service companies including Entertainment Partners and significantly strengthens Hawaii's film and television incentive program.

BACKGROUND: WHAT CHANGED IN 2024

As we communicated in August 2024, the Hawaii Department of Taxation (DoTax) changed its enforcement position and began requiring motion picture payroll service companies to collect and remit GET on the entire gross payroll invoice — rather than only on our payroll handling fees.

Prior to that change, under a long-standing arrangement, GET applied only to EP's net payroll handling fee. The policy shift created a significant cost increase for clients.

WHAT SB 2580 DOES: GET EXEMPTION RESTORED

SB 2580 directly addresses this problem by restoring net basis treatment (i.e., application of GET to the payroll handling fee and not the labor-related client reimbursements such as wages, compensation, and taxes). The exemption also applies equally to loan-out payroll and not just individual direct hire payroll.

As a result, EP's GET charge will return to applying only to our payroll handling/service fee — substantially reducing the GET cost to productions.

Effective Date: The exemption became effective upon the Governor's signature on July 6, 2026 for more immediate benefit to productions.

Thank you for your continued partnership.