Hawaii Expands Its Film Production Tax Credit
by Will Ramirez, on Aug 17, 2026, 10:15:00 AM
A Local-Hire Bonus, Larger Caps, and a Longer Sunset
Film and television incentives are among the most competitive location tools states offer, and they are frequently adjusted as jurisdictions vie for productions. In July 2026, Hawaii moved to strengthen its hand, enacting a substantial expansion of its film production tax credit.
For producers, studios, and the crews they employ, the changes improve both the value and the certainty of shooting in Hawaii — raising the credit’s rates and caps while extending the program well into the next decade and rewarding the use of local labor.
Recent Program Activity: What Changed
On July 6, 2026, Governor Josh Green signed Senate Bill 2580 into law as Act 185, amending Hawaii’s Motion Picture, Digital Media, and Film Production Income Tax Credit. The law makes several enhancements, most of which apply to qualifying costs incurred after December 31, 2025.
The headline changes are a new local-hire bonus, higher caps, and a longer sunset. Notably, the law does not raise the base credit rates; the base rates of 22 percent (Oahu) and 27 percent (Neighbor Islands) are retained, after a proposed increase was removed during conference negotiations. Instead, beginning with costs incurred after December 31, 2025, a production whose workforce is at least 80 percent local hires earns an additional 5 percentage points, bringing effective rates to 27 percent and 32 percent. The law also raises the maximum credit per production to $20 million (from $17 million) and exempts productions with at least $60 million in qualified costs from that per-production cap, and it lifts the aggregate annual program cap to $60 million (from $50 million). Beginning with costs incurred after December 31, 2023, any unused annual cap carries forward to the following year. The program’s sunset is extended to January 1, 2038.
Program Overview: How the Credit Works
Hawaii’s film credit is a refundable income-tax credit based on a percentage of a production’s qualified in-state spending — including wages, goods, and services purchased from Hawaii vendors. The base credit rate is higher on the Neighbor Islands (27 percent) than on Oahu (22 percent) — reflecting a policy preference for spreading production activity beyond Honolulu — and these base rates are unchanged from prior law.
With the new local-hire bonus, effective rates rise to as much as 27 percent on Oahu and 32 percent on the Neighbor Islands for productions that meet the 80 percent local-workforce threshold. To claim the credit, productions must meet minimum-spend requirements, satisfy documentation and verification rules, and comply with the program’s other conditions, and the credit is administered within the per-production cap and the overall annual program cap.
Why the Expansion Matters
Production incentives are a comparative game: producers weigh one jurisdiction’s credit rate, caps, and reliability against another’s. Hawaii’s competitive effective rates — up to 27 percent on Oahu and 32 percent on the Neighbor Islands once the local-hire bonus is included — and its larger caps improve the state’s standing relative to competing locations, and the bonus ties richer benefits to local economic impact. Perhaps most important for slate planning, the extension of the sunset to January 1, 2038 gives studios a long, predictable runway — reducing the risk that a program lapses partway through a multi-year production commitment.
The increase in the annual cap, combined with carryforward of unused capacity, also expands the practical room for the state to support more or larger productions in a given year.
What Companies Should Do
Producers evaluating Hawaii should model the credit — including the local-hire bonus and the Oahu versus Neighbor Island rate difference — against total production economics and against competing jurisdictions. Because the benefit depends on qualified in-state spend and on meeting the local-workforce threshold, early planning around vendor sourcing and crew hiring can materially affect the credit captured.
Given the per-production and annual caps, timing and early engagement with the administering authorities are also important, particularly for larger productions that could approach the caps.
How SSG Can Help
Site Selection Group helps companies evaluate location decisions and the incentives that support them, including industry-specific programs like film and production credits. We model incentive value against total project economics, compare programs across competing jurisdictions, and help clients plan around eligibility requirements and program caps.
Program details verified against primary sources as of August 1, 2026. This article is provided for general information and does not constitute tax or legal advice.
