Accountable USA - Hawaii

For its size, Hawaii gives away an enormous amount in subsidies. Hawaii’s controversial Act 221 High-Technology Tax Credit is estimated to cost the state more than $100 million a year. Film and Digital Media Income Tax Credits have also been running at more than $100 million annually. From 2006 to 2009, the producers of the wildly successful television show Lost raked in about $32 million in such credits (see below).

Not only have some companies benefited greatly from these credits, but special legislatively enabled deals have allowed even more subsidies. For example, in 2002 a real estate developer seeking help from the legislature for a struggling resort development was awarded $75 million in tax credits to build an aquarium to make the destination more appealing (see below).

The state’s lavish tax credit programs have generated recurring controversies. In 2002, a telephone company, Central Oahu, was criticized for receiving Enterprise Zone tax credits after the city gerrymandered the zone to add a single property outside the zone. The expensive Act 221 high-technology credits, created in the late 1990s, were filled with loopholes from the start.  Instead of incentivizing actual high-tech companies as intended, the porous law enabled footloose companies involved in media, insurance and banking to create shell corporations for their IT departments and qualify for credits. Individual investors in companies, including non-high-tech operations, could put up to $2 million into a company and claim an equal amount against Hawaii taxes over a five-year period. Years after they were created, the state tax department erroneously justified their continued existence as a countermeasure to the recession of 2008. In 2010, the state legislative voted to eliminate the credits but then-Gov. Linda Lingle vetoed the measure.

After handing out more than $1 billion in high-tech credits over a decade, the state finally decided in 2007 to mandate limited recipient disclosure (names but not amounts) and to require reports on their economic impact. Despite numerous attempts to require across-the-board disclosure and improve accountability measures, the state has resisted; the state’s economic development agency claims that keeping track of taxpayer money would be “too burdensome.” Apart from the crude and incomplete high-tech disclosure, only one more of the five major programs we examined discloses recipient information online, the Enterprise Zone program. 


Click on the links below for the latest data on Hawaii:


    Corporate Misconduct in Hawaii:

            Results page for Hawaii in Violation Tracker

    Subsidy Deals in Hawaii:

            Results page for Hawaii in Subsidy Tracker

    Tax Revenue Lost by Hawaii Governments to Subsidy Programs:

            Results page for Hawaii in Tax-Break Tracker (available soon)

    Mega-deals in Hawaii:

            Spreadsheet of subsidy deals over $50 million (can be filtered by state)

    Institutional Schematic for Enforcing Disclosure in Hawaii:

            Hawaii GASB-77 Roadmap

    Exemplary Journalism on Economic Development Incentives in Hawaii:

            (available soon)


ß Back to map



Key Subsidy Programs

Subsidy Program Recent Annual
Online Recipient
Recipient Disclosure
Job-Quality Score**
Enforcement Score***

Capital Goods Excise Tax Credit

credits against corporate income taxes for excise taxes paid on the purchase of capital goods

$14.7 million (2005)

Employment and Training Fund Statewide Training Grants

grants to “high-growth” industries for training costs; 2001 audit found lax accountability

$1 million (2010)

Enterprise Zones

a controversial program enabling tax breaks for selected companies in designated areas

$1.6 million (2005)

Film & Digital Media Income Tax Credit (Act 88)

an expensive and controversial program allowing corporate income tax credits for film and media companies

$129 million (2008)

* The score is derived from the Good Jobs First report Show Us the Subsidized Jobs (January 2014).

** The score is derived from the Good Jobs First report Money for Something (December 2011).

*** The score is derived from the Good Jobs First report Money-Back Guarantees for Taxpayers (January 2012).

Major Subsidy Deals

Lost (2006-2009)

Lost, the hit ABC TV series about a downed airliner and its 48 stranded survivors, was set on a remote island in the South Pacific. The filming took place on Hawaii, where the producers enjoyed an estimated $32 million in tax benefits from the state. Hawaii’s Act 88 film and TV tax credits, which were enhanced in large part to keep Lost in the state, are worth 15 percent of production costs for projects over $200,000 on Oahu and 20 percent on other islands. Although the series is estimated to have spent $228 million in Hawaii between 2006 and 2009, critics question whether the state needed to subsidize a show that was wildly successful and that needed a tropical setting that could not be found in most areas of the country. (Key sources)

Ko Olina aquarium (2003)

In 2002 developer Jeff Stone offered to build an aquarium and marine science center at his planned Ko Olina Resort & Marina outside Honolulu – if the state agreed to provide $75 million in tax credits. Stone claimed that the attraction would help the stalled $700 million resort project move ahead. The state legislature approved legislation authorizing the credits, but the controversial measure was vetoed by Gov. Ben Cayetano. Stone brought the matter up again after Cayetano left office, and in May 2003 Gov. Linda Lingle signed a re-passed bill into law. In 2004 the Honolulu Advertiser reported that a key backer of the tax credit in the state senate had business ties to Stone. The resort got built but the aquarium did not, prompting some state legislators to consider revoking the tax credits. The following year Stone decided the resort did not need an aquarium after all, and agreed to forego the tax credits. It later came out, however, that he claimed $3.45 million in credits for design and planning expenses related to the aborted project. (Key sources)

Walmart in Hawaii

  • Good Jobs First found no instances of Wal-Mart subsidies in Hawaii, but given the absence of comprehensive centralized data, it is still possible that deals have quietly occurred.
  • We found no instances of property tax assessment challenges by Wal-Mart in Hawaii, but given the absence of centralized data, it is still possible that appeals have occurred.
  • Many Wal-Mart workers are ineligible for health coverage from their employer or choose not to purchase what is available, because it is too expensive or too limited in scope. These workers often turn to taxpayer-funded health programs such as Medicaid. Hawaii is among those states that have not disclosed data on the employers with the most workers or their dependents enrolled in such programs.

For more information, see Wal-Mart Subsidy Watch.