Hawaii General Excise Tax (GET)

Hawaii’s general excise tax (GET) is an added tax on top of federal and state income taxes. The GET is very similar to a state sales tax, but it covers more than just goods and services—it also includes fees for shipping and handling charges. Whether you must pay GET in Hawaii depends on having significant connections with the state, known as nexus. Before 2018, nexus was based on physical presence, meaning that you had to have an office, retail store, warehouse, or other business location in the state to be required to register and remit GET. However, the Supreme Court decision in South Dakota v. Wayfair has opened the door for states to require GET from businesses with virtual and economic nexus.

If you have nexus in Hawaii, you must collect and remit the GET on all taxable transactions. For most business activities, the statewide GET rate is 4%, and there are county surcharges of 0.5% on Oahu and Kauai and 0.15% on the Big Island. In addition, some industries have broader exemptions (e.g., insurance commissions).

Who Must Pay Hawaii GE Tax?

The GE tax is Hawaii’s main source of public revenue and is collected from businesses’ gross sales. While many people may associate the GE tax with tourism, the truth is that it applies to everyone. The state has an extensive list of activities that are subject to GE tax, including wholesale and retailing, services, commission income, rents received, business interest income, and even certain royalties.

The taxes are a little different from a traditional state sales tax because they’re applied to a business’s gross revenue, not on the final price of a product or service to consumers. Nevertheless, GE taxes can add up for any business that doesn’t take proper measures to file and remit them correctly.

If you’re running a business in Hawaii and you’re not sure whether or not you’re required to pay GE tax, contact DOTAX directly to find out more information. Generally, the state asks small and medium-sized businesses to file on a quarterly basis. However, larger companies may be asked to file more frequently. The state will assign your filing frequency, and you’ll be required to meet the assigned due dates in order to avoid late penalties and interest charges.

Hawaii General Excise Tax Due Dates

Your GE filing frequency depends on how much you sell to buyers in the state of Hawaii and when you make those sales. Hawaii GE returns are due on the 20th of the month following each reporting period. Your return is due the next business day if the deadline falls on a weekend or holiday. Missing a Hawaii GET filing deadline can result in late penalties and interest charges.

Hawaii General Excise Tax Exemption

Unlike states that have sales tax holidays, Hawaii has no special exemptions from its general excise and use tax (GET). This broad gross receipts tax applies to almost all business activities, including wholesaling, retailing, farming, services, construction contracting, rental of personal or real property, and even the business interest income of a self-employed person.