Sales Tax Guide for Hawaii

Hawaii is an amazing state in the United States that is not only populous but also a famous tourist destination. Hawaii is a different state in that it does not have a state sales tax.  Instead of that Hawaii State has a general excise tax. The General Excise Tax (GET) is technically levied against a business’s gross receipts for doing business in Hawaii. A vast majority of business activities in Hawaii are subject to a 4 percent tax. While wholesale transactions are subject to a 0.5 percent tax, insurance commissions are charged a mere 0.15 percent tax.

How does a GET differ from Sales Tax?

Unlike the sales tax, the GET is levied on the seller and incidentally not the purchaser. While a sales tax is paid by the ultimate consumer, Hawaii’s GET is assessed with each transaction. Each product passes through the stream of commerce. The bottom line is that most products which are brought into Hawaii from the mainland are priced higher by the end seller due to the high amounts of the GET paid all along the way.

When is Hawaii General Excise Tax Returns Due?

It depends generally on two things:

  • Assigned filing frequency
  • State due dates

You get your filing frequency based on when you register. How often you file depends on the amount of general excise tax from buyers. States will be assigned a filing frequency. That could be monthly, quarterly or even annually. Hawaii Tax returns are due by the 20th of the month post the reporting period.

Who needs a Sales Tax Permit?

All sellers in Hawaii who provide any kind of service or have a nexus are subject to the general excise tax. Hawaii has specifically defined what it means to do business on their official GET site.

How to Register for a GET Permit in Hawaii?

One should register online or in person at the Hawaii Department of Taxation.

  • Personal identification info
  • Corporate entity type
  • Business identification info
  • Accounting method
  • Accounting period
  • Miscellaneous information

How much does it cost for a Sales Tax Permit?

Hawaii GET permit application costs $20. One will receive the permit anywhere in 3-5 days. You can register online, bywalk-inn or by the application.

How are the Sales Taxes Calculated in Hawaii?

The general rate is 4%. Cities or municipalities there do not have a city sales tax. Hawaii cities do not have a hiked rate as with some. The tax rate will change depending up on the type of purchase.

Who is Eligible for Hawaii Tax Exemptions?

Under Hawaii law, most taxable goods will be eligible for a GET exemption based on the type of buyer. Some transactions are exempt from taxation-

  • Those where the merchant is processing goods for resale
  • Government agencies
  • Non-profit organizations
  • Religious groups
  • For out of state buyers

Are there any Penalties and Interest for Late Payment?

It is important to file a return in time. If you don’t submit your tax paperwork, you may accrue interest and fines unnecessarily. This may cloud and the best way is thus to get the filing done as soon as possible. One may imposed a due as deemed fit by the Hawaii department of taxation. Also, when one is acquiring a business, it is important to check and conform if any outstanding liabilities and debts are paid off.