Hawaii Sales Tax Rate 2025: Rules, Penalties & Filing Guide

Hawaii’s tax system is unique compared to other states, as it uses a General Excise Tax (GET) instead of a traditional sales tax. Whether you’re a business owner or a consumer, understanding how Hawaii sales tax works is essential for staying compliant and managing costs effectively.

The General Excise Tax applies to nearly all business transactions, while the Use Tax covers out-of-state purchases brought into Hawaii. Knowing the differences, tax rates, exemptions, and filing requirements can help businesses avoid penalties and streamline their tax obligations. 

This guide will explain everything you need about Hawaii’s sales tax system and how it impacts businesses and consumers.

What is the Sales Tax Rate in Hawaii?

Hawaii does not have a traditional sales tax; instead, it imposes a General Excise Tax (GET) on businesses for the privilege of conducting business in the state. Unlike sales tax, which is typically passed directly to consumers, the GET is levied on businesses but often included in the final price of goods and services.

The statewide base GET rate is 4%, but certain counties impose a surcharge, leading to slightly higher rates in specific areas.

In summary:

• State General Excise Tax Rate: 4.00%
• County Surcharges: Up to 0.50% (varies by location)
• Maximum Combined GET Rate: 4.50% (for Oahu, Kauai, and Hawaii County)

Hawaii Sales and Use Tax Overview

The General Excise Tax (GET) in Hawaii applies to nearly all business activities, including retail sales, services, and rentals. The Use Tax complements the GET and applies to goods purchased out of state for use in Hawaii when sales tax was not collected at purchase.

The Hawaii Department of Taxation oversees the General Excise and Use Tax administration, ensuring businesses comply with tax collection and remittance requirements.

Taxable Goods and Services

Most transactions in Hawaii are subject to GET, including:

• Tangible personal property: Clothing, electronics, furniture, and other physical goods.
• Services: Professional, consulting, and repair services.
• Rental income: short-term vacation rentals and long-term leases.
• Online sales: Remote sellers conducting business in Hawaii must comply with GET requirements (Hawaii Revised Statutes §237-2).

Exemptions and Special Considerations

While GET applies broadly, some sales tax exemptions and unique tax treatments exist:

• Wholesale transactions: A lower GET rate of 0.5% applies to wholesale sales.
• Nonprofit organizations: Qualifying nonprofits may be eligible for GET exemptions (Hawaii Revised Statutes §237-23).
• Exported goods and services: Businesses selling to out-of-state customers may qualify for reduced tax rates or exemptions.
• Certain medical services and equipment: Some healthcare-related services and devices may be exempt.

For a complete list of taxable and exempt items, click here.

When Do Businesses Need to Collect Sales Tax in Hawaii?

Businesses in Hawaii must comply with the Hawaii sales tax system, structured as a General Excise Tax (GET) rather than a traditional sales tax. Companies must register for GET, collect the appropriate tax, and remit it to the Hawaii Department of Taxation.

Hawaii imposes tax collection obligations on businesses based on physical presence and economic nexus laws. Understanding these requirements ensures compliance and prevents penalties.

When to Collect Sales Tax in Hawaii

Hawaii businesses must collect and remit GET when establishing a nexus in the state. Nexus is determined by physical or economic presence.

Physical Nexus

A business has a physical nexus in Hawaii if it meets any of the following criteria:

• Maintains a physical office, store, or business location in Hawaii.
• Has employees, representatives, or independent contractors conducting business in the state.
• Owns or leases property, equipment, or inventory in Hawaii.
• Engages in business activities such as sales, advertising, or product demonstrations within the state.

Economic Nexus

Hawaii economic nexus laws require tax collection from remote sellers and out-of-state businesses. Under the Wayfair decision, companies must collect Hawaii sales tax (GET) if:

• They generate $100,000 or more in gross revenue from sales into Hawaii within a calendar year or
• They engage in 200 or more separate transactions with Hawaii customers annually.

This means out-of-state businesses selling to Hawaii customers through e-commerce platforms must register and collect GET if they exceed these thresholds.

For more information on tracking taxes, filing returns, and ensuring compliance, consult Commenda.

Failure to Collect Hawaii Sales Tax

Failure to comply with Hawaii sales tax obligations, or the General Excise Tax (GET), can result in severe penalties, interest charges, and legal consequences. Businesses that do not properly collect, report, and remit GET may face financial and legal risks, making compliance essential.

Below is an overview of the potential penalties and interest charges for failing to comply with Hawaii state sales tax requirements.

1. Penalties

Hawaii imposes strict penalties for businesses that fail to file or pay GET on time. These penalties apply as follows:

• Late Filing Fee: A minimum penalty of $50 per return applies, even if no tax is due.
• Late Payment Penalties:
  • 5% penalty if the tax is paid 1-30 days late.
  • 10% penalty if the tax is paid more than 30 days late.
  • 25% maximum penalty if a business repeatedly fails to file and pay taxes.

If a business is issued a tax notice and fails to pay by the due date, an additional 10% penalty may be applied, increasing the total amount owed.

2. Interest Charges

Interest begins accruing on unpaid Hawaii state sales tax from the due date of the return. The interest rate is determined annually based on federal rates plus 2%.

For example:

• If the federal interest rate is 3%, the Hawaii sales tax interest rate would be 5%.
• Interest continues to accrue until the outstanding tax is fully paid.

3. Additional Consequences of Non-Compliance

Failing to comply with Hawaii sales tax laws may lead to:

• Tax Liens: The Hawaii Department of Taxation may place a lien on business assets for unpaid tax balances.
• Business License Revocation: Businesses that fail to comply may have their General Excise Tax License revoked.
• Legal Action: Continued non-compliance can result in criminal charges, including fines and potential imprisonment.

Also read: U.S. Sales Tax Penalties: What Are the Penalties for Filing Late[Not Paying]?

Hawaii Sales Tax for Out-of-State Sellers and Amazon FBA Program Sellers

Hawaii enforces economic nexus laws, requiring out-of-state businesses, including online retailers and marketplace sellers, to comply with Hawaii sales tax rules. Even if a business has no physical presence in Hawaii, it may still be obligated to register for and collect the General Excise Tax (GET) if it meets specific sales thresholds.

Economic Nexus for Remote Sellers

Under Hawaii’s economic nexus law, an out-of-state seller must register for GET if:

• It generates $100,000 or more in gross revenue from Hawaii-based customers in a calendar year or
• It completes 200 or more transactions with Hawaii customers annually.

Once a seller exceeds these thresholds, they must register for GET and begin tax collection from the first day of the following calendar year.

Amazon FBA and Online Marketplace Sellers

Sellers using fulfillment programs, such as Amazon’s Fulfillment by Amazon (FBA) or other third-party logistics providers, must be aware of inventory storage implications:

• If an FBA seller has inventory stored in a Hawaii-based fulfillment center, this constitutes a physical nexus, requiring tax registration and collection.
• Amazon and other marketplaces may collect and remit GET on behalf of sellers, but independent sellers must ensure compliance for direct transactions.

Registering for a Hawaii Seller’s Permit

To conduct business in Hawaii, you must register for a Hawaii General Excise Tax (GET) License, which functions similarly to a seller’s permit in other states. This license is required for any business engaging in sales, services, rentals, or other taxable transactions within the state. Whether you operate a physical storefront or sell remotely, obtaining a GET license ensures compliance with Hawaii sales tax laws.

Steps to Register for a Hawaii GET License

Business owners must follow these steps to register for their Hawaii state sales tax permit and comply with Hawaii sales tax rates:

1. Determine Your Business Structure
   • Before applying, identify whether your business operates as a sole proprietorship, LLC, partnership, or corporation.
   • If forming an LLC or corporation, register with the Hawaii Department of Commerce and Consumer Affairs (DCCA) before applying for GET.
2. Obtain a Federal Employer Identification Number (EIN)
   • If your business has employees or operates as a corporation or partnership, an EIN from the IRS is required before registering for GET.
   • Sole proprietors without employees may use their Social Security Number (SSN) instead.
3. Complete Form BB-1
   • Hawaii requires businesses to submit Form BB-1 (Basic Business Application) to apply for a Hawaii state sales tax permit (GET License).
   • This form requires details such as:
     • Business name and structure
     • EIN or SSN
     • Business address and contact information
     • Estimated gross sales revenue
4. Submit Your Application
   • Businesses can apply for faster processing through the Hawaii Tax Online portal.
   • Alternatively, paper applications can be mailed to the Hawaii Department of Taxation.
5. Pay the Registration Fee
   • The one-time registration fee for a Hawaii General Excise Tax (GET) License is $20.
   • Payment can be made online at the time of application.
6. Receive Your GET License
   • Once approved, businesses will receive a Hawaii GET License number, which must be displayed at the place of business.

For more information, click here.

How to Collect Sales Tax in Hawaii

In Hawaii, businesses charge the General Excise Tax (GET) on gross income from sales and services. The Hawaii state sales tax rate (GET) is 4.0%, with an additional 0.5% surcharge in Hawaii County, making the total 4.5%.

To correctly collect sales tax in Hawaii, businesses must:

1. Register for a GET license through Hawaii Tax Online.
2. Charge GET on all taxable sales, ensuring customers know the added cost.
3. Use a Hawaii sales tax calculator to apply the correct tax rate.
4. File and remit GET payments to the Hawaii Department of Taxation monthly, quarterly, or annually.

Keeping track of Hawaii state sales tax rates and economic nexus rules can be complex. Automating tax compliance with Commenda ensures accurate tax collection, reporting, and filing, saving businesses time and effort.

Tax-Exempt Customers in Hawaii

Certain businesses and organizations qualify for sales tax exemptions in Hawaii under the General Excise Tax (GET) system. Hawaii sales tax-exempt customers include:

1. Nonprofit Organizations – Charitable, religious, and educational institutions with 501(c)(3) status may be exempt.
2. Resale Transactions – Wholesalers purchasing goods for resale can avoid GET by providing a Hawaii resale certificate.
3. Government Agencies – Federal and state government entities are generally exempt from Hawaii state sales tax rates.
4. Interstate Commerce Sales – Sales made to customers outside of Hawaii may be exempt.

Businesses can use a Hawaii sales tax calculator to confirm eligibility and exemptions. Consult the Hawaii Department of Taxation for updated policies on economic nexus and tax exemptions. For more information, click here.

Filing Sales Tax Returns in Hawaii

Businesses registered for Hawaii state sales tax (General Excise Tax or GET) must file returns and remit collected taxes based on their assigned filing frequency. Below is a breakdown of the Hawaii sales tax filing schedule and payment methods.

Filing frequency

Filing Steps

To file Hawaii sales tax returns, follow these steps:

1. Log in to Hawaii Tax Online – Access the Hawaii Department of Taxation (DOTAX) portal.
2. Select General Excise Tax (GET) – Choose the appropriate tax period.
3. Enter Sales and Exemptions Data – Report gross, taxable, and exempt sales.
4. Review and Verify Information – Ensure accuracy before submission.
5. Submit the Return – File electronically via the Hawaii Tax Online portal or submit a paper return (Form G-45).
6. Make Payment – Pay any owed GET using one of the accepted methods listed below.

How to Pay Your Hawaii Sales Tax

Hawaii businesses can pay GET (General Excise Tax) and Use Tax using the following methods:

1. Electronic Funds Transfer (EFT) – Direct bank transfer for secure and timely payments.
2. E-Check – Electronic check payments require a bank routing number and account details.
3. Credit or Debit Card – Payments can be made via Hawaii Tax Online, but processing fees may apply.
4. ACH Credit – Businesses can initiate ACH Credit payments through their financial institutions following Hawaii Department of Taxation guidelines.

Using Sales Tax Automation Tools

Managing sales tax in Hawaii can be time-consuming. However, businesses can make this process more manageable using sales tax automation tools. One such tool is Commenda, a powerful automation platform that streamlines Hawaii sales tax calculations, reporting, and filing. By leveraging Commenda, you can automate the entire process, ensuring accuracy and efficiency in your tax obligations.

With Commenda’s sales tax automation, businesses can automatically calculate the correct Hawaii sales tax rate for every transaction based on Hawaii’s most current tax rates and exemptions. This significantly reduces the risk of human error and ensures compliance with Hawaii sales tax regulations.

Hawaii Sales Tax Compliance Checklist

Below is a handy checklist to ensure sales tax compliance in Hawaii:

1. Determine Nexus: Verify if your business has a physical or economic nexus in Hawaii to determine sales tax collection requirements.
2. Register for a Seller’s Permit: Obtain a seller’s permit through the Hawaii Department of Taxation before collecting sales tax.
3. Charge the Correct Sales Tax Rate: Use the accurate Hawaii state sales tax rate and local tax rates for every transaction.
4. Collect Sales Tax: Be diligent in collecting the correct sales tax from customers for taxable goods and services.
5. File Sales Tax Returns on Time: Submit your Hawaii sales tax returns based on your filing frequency (monthly, quarterly, or annually).
6. Remit Payments: Pay collected taxes to the Hawaii Department of Taxation by the due date to avoid penalties.
7. Track Exempt Transactions: Keep records of sales tax exemptions for applicable customers and products.
8. Maintain Accurate Records: Keep detailed and accurate records of all sales transactions, tax collected, and filed returns for at least 3 years.

How Should I Prepare for Hawaii Sales Tax Audits and Appeals?

Preparing for a Hawaii sales tax audit is crucial for businesses, with the right steps, you can ensure that your business remains compliant and ready for any audits. Here’s how you can prepare:

Preparation steps

Preparing for a Hawaii sales tax audit requires careful attention to detail and thorough record-keeping. Here’s how you can ensure you’re ready:

1. Review Your Sales Records: Ensure all sales transactions are documented and accurate. Look for discrepancies or missing information that might raise red flags.
2. Understand Hawaii Sales Tax Laws: Familiarize yourself with Hawaii sales tax exemptions, rates, and economic nexus rules.
3. Organize Documentation: Gather receipts, exemption certificates, sales tax returns, and supporting documentation for your tax filings.
4. Conduct Internal Audits: Perform internal audits to spot potential issues before the official audit.

During the Audit

When the Hawaii Department of Taxation contacts you for an audit, follow these tips:

1. Be Transparent: Provide clear and accurate records. Discrepancies or missing documentation can delay the process and may lead to penalties.
2. Stay Calm and Cooperative: Audits can feel intimidating, but maintain professionalism and work with the auditor to resolve any questions.
3. Have a Tax Professional: Consider consulting a tax professional if you’re unsure of any details during the audit.
4. Review Findings Carefully: Once the audit is complete, carefully review the findings. If there’s a discrepancy, know that you can appeal the decision.

Hawaii Sales Tax Rates by City

Hawaii imposes a General Excise Tax (GET) rather than a traditional sales tax. The general GET rate is 4% across the state, meaning the GET rate is applied uniformly across each county.

Note: While the general rate for Hawaii state sales tax (GET) is 4%, individual counties or cities do not levy additional rates on top of that for general sales transactions. However, there are exceptions for specific goods and services that may be taxed differently.

Want to Handle Sales Tax the Easy Way?

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FAQs

What triggers the Hawaii sales tax nexus?

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What is Hawaii’s economic nexus rule for remote sellers?

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Are There Special Taxes, Excise Charges, or Local Add-Ons I Need to Consider?

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What Is the Penalty for Filing and/or Paying Hawaii Sales Tax Late?

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