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Hawaii's General Excise Tax- A Comprehensive Guide!

Updated: Oct 20

Hey there, entrepreneur! Are you considering a business in Hawaii? Let’s talk about the General Excise Tax—an essential aspect of business in paradise. This tax applies to all business types, including trading, services, and rentals. `


Whether setting up a tiki bar or launching a surf school, understanding this tax is crucial. It's not just about selling bikinis —every part of your business, from customer service to profits, will be affected. 


Let's sip a Mai Tai  and consider how this tax fits into your island business plan. 



What is Hawaii's General Excise Tax (GET)?


The GET is defined as a privilege tax on business activities in Hawaii. It totals a business entity's gross income before deducting any expenses. In contrast to taxes that end users pay, such as a sales tax, the GET is a business tax.


Employers are also bound to meet the GET even if it is not reflected in the price charged to customers. The rate depends on the kind of business activities . The majority are taxed at 4% or 4.5% and contribute to the county surcharges, while the few wholesale and insurance commission activities are taxed at 0.5% and 0.15%.


Looking for more details on Hawaii's General Excise Tax? Head to the Hawaii Department of Taxation for all your basic information!


About Nexus- When Does Your Business Trigger Tax Obligations?


Any business entity with a nexus, that is, a connection to Hawaii, is mandated to register for GET. Nexus can be created by maintaining a physical presence in Hawaii, making sales of tangible property or stock of goods, or deriving receipts from services performed in Hawaii. 


For example, importing items such as floral shirts or ukuleles into Hawaii automatically creates a tax obligation.


Tax Rates and Applications for Different Businesses


Hawaii's GET applies differently based on business activities:

  • 0.5% for wholesalers, manufacturers, and producers.

  • 4% or 4.5% for retail sales, rentals, services, and commissions (including real estate and contracting services).


Bookkeeping Tips

Need help? Hawaii offers top-notch services:

  • Kauai Bookkeeper and Maui Bookkeeper are on hand.

  • Services like Kauai bookkeeping and Big Island bookkeeping ensure that your business meets its financial and tax responsibilities.


Final Thoughts- Pick Your Hawaii Bookkeeper


Choosing a Hawaii Bookkeeper is like picking the perfect avocado. Go for someone savvy in Hawaii financial services. Whether you're operating on Oahu, Maui, or the Big Island, a professional familiar with Hawaii's tax system is invaluable. 


Are you prepared to take on Hawaii’s taxes? Grab your surfboard, and let’s catch the General Excise Tax wave together! 


Need help with Hawaii's General Excise Tax? Let Hanalei Bookkeeping handle the nitty-gritty while you focus on growing your island business! 


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