Hawaii Sales Tax Guide

🌺🌊🌴 Aloha! Hawaii is the 50th state in the union and quite literally a paradise on Earth! Hawaii’s glorious panoply of flora make it an incredibly special place to live and work, and their iconic lunch plates, spam musubi, poke (poe-kay) and other local cuisine make it a wonderful/dangerous place to eat. If you count yourself fortunate enough to own a small business in Hawaii, you’ll want to maintain your chill by ensuring your business stays compliant with Hawaii’s tax laws. No worries! We have put together this handy-dandy guide so that you can be prepared to meet all tax requirements for a Hawaiian small business.

Unlike other states which require a specific transactional sales tax, Hawaii has what’s known as a General Excise Tax, or GET. This tax is on all of the gross receipts of a business, irrespective of the source, type, or sales tax-exempt status of the transaction. In this guide, we’ll still use the term “sales tax” since that is what most people search for.

Confused? Fret not! After reading this guide, you will know the answers to some of the most important questions our clients ask regarding sales tax for their small business:

• How to be prepared should you wish to call the Hawaii Department of Taxation.
• How to contact the Hawaii Department of Taxation.
• When to charge sales tax in Hawaii.
• What goods, products, and services are taxable in Hawaii.
• When you establish a sales tax nexus with the state of Hawaii, and the nuances of various thresholds.
• How to register for a sales tax license in Hawaii.
• How to collect sales tax in Hawaii.
• How to file and pay sales tax in Hawaii.

If, after reading, you still have any questions to help you determine your sales tax obligations in Hawaii and how to fulfill them, we are here for your small business bookkeeping needs!

Hawaii Tax Contacts

✅ Do you need to contact the Hawaii Department of Taxation?

✅ Are you unsure if you should visit, call them, or contact them through their website?

✅ Do you wonder what information you should have ready before you contact them?

If you answered “Yes” to these questions, read on as we have just the information you seek!

You can reach the Hawaii Department of Taxation by phone at 808-587-4242.

Alternatively, you may also send an email to Taxpayer.Services@hawaii.gov or visit one of their District Office Buildings. If you are looking for help quickly, we highly suggest you call rather than send a message or wait in line.

When you call the Hawaii Department of Taxation, you want to have some information on hand. It will save time to have the following information easily accessible before you call:

• Taxpayer Name
• EIN
• Sales & Use Tax ID Number

If you are calling on behalf of an individual or a business, or having a third party call on your behalf, you must have a Hawaii Power of Attorney (form N-848, PDF) signed before you call or else you will be wasting your time; they can only help if you are ready to go with one of these forms.

If you have any more questions, please feel free to contact us so we can assist you with your sales tax needs.

Hawaii Sales Tax (GET) Registration

Are you a business of any kind making money in Hawaii? If yes, you are going to need to register your business so that you can pay your share of sales tax (GET).

Luckily, you only need to do this once and we’re about to fully prepare you for the process. As long as there are no major changes (such as a change in ownership or structure) to your business, you will not be required to renew or make changes to your sales tax permit.

We are going to detail the steps below so you are ready to register for your GET license.

Here we go! Don’t forget...

Preparation is key.

Let’s get started!

How do I register to collect sales tax in Hawaii?

You can apply or register for a Hawaii sales tax permit by visiting the Hawaii Department of Taxation and following the instructions provided.

Technically, you have two options when signing a new business up for a Hawaii sales tax permit, though we always recommend going with the online option:

1. Complete paper form BB-1 Application (PDF) and return it to any local tax office.
2. Complete the online version of form BB-1 here.

Again, we highly recommend that you use the online form as it will allow your business to get set up faster, and with less potential for any mail whoopsies.

What information do I need to register for a Hawaii sales tax permit?

Great question! You get a gold star for thinking ahead ⭐ :)

Before you sign up for Hawaii sales tax permit you want to have the following information easily accessible:

• Business name
• Business entity type
• Description of business activities
• Date business activities began or will begin
• Business address and mailing address
• Business contact information
• Associated business entities
• NAICS code that best matches the business
• Federal Employer Identification Number (FEIN)
• List of business officers, partners, managing members, and/or trustees

Don’t forget! Preparation is key. When you have all this information ready, you can go online and register for your permit at the Hawaii Business Tax Application (BB-1 e-file) website.

How much does it cost to register for a Hawaii sales tax permit?

Hawaii keeps it reasonable and only charges $20 for a GET permit.

Do I need a Federal Tax ID Number or EIN to register for A Hawaii sales tax permit?

You surely do! If you don’t already have one and need to get an EIN, it’s a painless and quick process; you can easily register for a Federal EIN here :).

Which agencies in Hawaii do I need to additionally register with?

You may want to check in to some of the following agencies:

• Hawaii Department of Labor
• Hawaii Business Express
• Department of Commerce and Consumer Affairs

You’ll want to give this some thought and do a little research or investigating; since every business is unique, and there are such different rules, regulations, and laws that may apply.

We suggest contacting to the Hawaii Department of Taxation to verify which government agencies you will be required to register with.

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You’re set!

You are now prepared to register for your Hawaii sales tax permit in Hawaii.

Let’s summarize where we reviewed:

• Have all the required information easily accessible before registering online.
• Acquire a tax ID or EIN before registering for a Hawaii sales tax permit.
• Register online at the Hawaii Department of Taxation website.
• Look into what other agencies you may have to additionally register with.

Registering for your Hawaii GET permit will be stress free as long as you are prepared. We recommend organizing all the essential information in a folder, preferably using a system like Box.com or Dropbox (one of the many things we make easy for our clients by setting up for them).

Hawaii Sales Tax FAQ

By now, you may have already contacted the Hawaii Department of Taxation and applied for a Hawaii GET permit.

Once you have a license to collect and remit taxes in Hawaii, you will probably be asking yourself two questions:

• When do I charge a sales tax in Hawaii?
• What goods and services are subject to sales taxes in Hawaii?

We are going to go over some common questions that our clients have asked. We believe these questions will help you appreciate the nuances of taxable goods so you can be confident in fulfilling your tax obligations.

Let’s start with the first question…

What goods and services are considered taxable in Hawaii?

Everything. Literally all of the things! Any goods or services that make revenue are taxable in Hawaii, due to their terming their sales tax a General Excise Tax. The assessed figure is based off revenue to any company doing business in Hawaii. It isn’t required that this tax be passed on to consumers, but it must be paid...

The bottom line is …

Your business is responsible for taxes on all transactions, potentially even normally tax-exempt ones.

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Let’s now review some of our clients’ frequently asked questions:

• Is Hawaii an Origin or Destination sales tax State?
• What creates a sales tax nexus in Hawaii?
• What is the economic threshold in Hawaii?
• Does Amazon have fulfillment centers in Hawaii?
• Does Hawaii have a Click-Thru Nexus?

To better understand your tax obligations, new businesses must consider how they are doing business and the type of relationships they have with buyers and any third parties to their transactions.

Let’s discuss some questions that will help you understand the nature of your own business and the subsequent tax implications.

Is Hawaii an origin or destination sales tax state?

Hawaii is kind of either/or. Because it’s a general excise tax vs. a traditional transactional based sales tax, it doesn’t matter where or how the money comes in; it’s going to be taxed as gross revenue. One difference your locality can make is various counties have surcharge rates that may apply.

Protip: Charge Hawaii excise tax irrespective of where the revenue is generated.

What creates a tax nexus with the state of Hawaii?

Having nexus, also known as "sufficient business presence,” with Hawaii means your business has established a taxing connection with a state. When this happens, you are required to collect and remit sales tax in Hawaii because you created a sales tax Nexus.

Even if your business maintains its main headquarters in another state, you may still have to charge and pay sales tax to the Hawaii Department of Taxation even if you never step foot in Hawaii.

So, how do you create a sales tax Nexus in Hawaii?

A business establishes a nexus in Hawaii by:

• having a business location in Hawaii;
• having property stored in Hawaii;
• employing any person in Hawaii;
• contracting with a salesperson or other agent in Hawaii;
• leasing equipment used in Hawaii;
• performing services in Hawaii;
• licensing the use of intangible property in Hawaii, or transporting property in Hawaii using the taxpayer’s vehicles.

Let’s talk a bit more specifically about where your goods are stored such as in the instance of an Amazon warehouse.

Does Amazon have fulfillment centers in Hawaii?

Nope! Probably too teensy a land mass to support this, but who knows what the future has in store :)

Does Hawaii have economic nexus?

Yes! As of July 1st, 2018, Hawaii enacted the following minimums for businesses operating outside the state that, once exceeded, requires them to register for GET permit and pay taxes:

Threshold: $100,000 or more or 200 or more separate transactions

Does Hawaii have click-through nexus?

No, Hawaii has no click-through nexus requirements; affiliate marketers are safe from extra tax at this time.

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Collecting sales taxes in the state of Hawaii needn’t be painful! Just remember to get your ducks in a row; making sure that you pay your taxes on time to avoid penalties and interest.

Before we conclude this topic, there’s a related question our clients regularly ask…

Is Hawaii a streamlined sales tax state?

Nope! At the time of this article’s writing Hawaii doesn’t participate in the multistate program.

Manage your tax needs more effectively by keeping this guide handy.

You and your business can be better-equipped to avoid situations like paying fines, paying back taxes that you did know you had to pay in the first place, or facing an audit by the tax authorities in Hawaii.

Collecting Sales Tax in Hawaii

If you are a business that has established a nexus with Hawaii, you are required to collect general excise tax. Knowing this is just half the battle! Now, we are going to help you with the next half of the battle: how to navigate the process of collecting taxes.

Let’s review some common questions our clients have asked regarding their Hawaii sales tax obligations.

• How do I collect Hawaii sales tax?
• Who is eligible for Hawaii sales tax exemptions?
• What should I do if my customer is exempt from sales tax in Hawaii?
• What happens if I lose a Hawaii nontaxable transaction certificate?

After reading this, you will be better equipped to determine when --and when not-- to collect sales tax in Hawaii.

How do I collect Hawaii sales tax?

Remember when we noted that Hawaii is a general excise tax state? This means that all revenue is taxed and the ultimate rate to charge will vary in accordance with the industry type (.15% for insurance, .5% for wholesale, 4% for anything else) plus any relevant county surcharge for the county in which the business is located.

Any Point-of-Sales software worth its price should have this capability baked in. If the one you’re using does not, we can always recommend a superior solution. That’s the kind of nerding out that we love to do for our clients! 🤓🤩

What are the current Hawaii sales tax rates?

At the time of this writing it is 4% plus potential county surcharge. But because tax rates can change frequently, we always suggest checking the official Hawaii Department of Taxation site here.

It can’t hurt to double check the sales tax rates to be sure.

What is exempt from Hawaii sales tax?

The only exempt scenario for Hawaii’s GET is directly shipping to a non-resident; only these sales may be exempt from GET.

Who are eligible for Hawaii sales tax exemptions?

Basically nobody! The nature of GET is such that even revenue from transactions with customers that have sales-tax exempt status are taxed. As such, this tax may be passed on to those customers as well.

What should I do if my customer is exempt from sales tax in Hawaii?

Charge them anyhow, as Hawaii puts the get into their GET by not concerning itself with exempt status :p.

What happens if I lose a Hawaii sales tax exemption certificate?

This shouldn’t apply as there is no such thing. So don’t worry about losing it, only how you found it in the first place. 

Does Hawaii have a sales tax holiday?

Nope, not at this time :(

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We have now covered who you need to collect sales taxes from, how to determine whether goods for sale are deemed taxable, what goods and services fall under tax exemptions (i.e. pretty much none), who is eligible for tax exemption certificates (nobody!), and, finally, the process of collecting sales tax in Hawaii state.

Now that we’re this far down the rabbit hole there’s only one thing we need to learn about next… how to pay the piper!

Filing and Paying Sales Tax in Hawaii

It is time to talk about filing and paying your sales taxes in Hawaii. In this section, We are going to cover the following frequently asked questions from our clients:

• When is Hawaii sales tax due?
• What are the Hawaii sales tax thresholds?
• What if a Hawaii sales tax filing date falls on a weekend or holiday?
• How do I file a Hawaii sales tax Return?
• How do I correct a Hawaii sales tax return?
• What happens if I don’t collect sales tax?
• What happens if I file or pay my sales tax return late?
• Do I need to file a return if I don’t collect any sales tax in Hawaii?
• If I close my business, do I need to file a final sales tax return?
• Does the Hawaii Department of Taxation offer a discount for filing on time?

By the time you finish reading this, you will feel confident enough to file and pay your Hawaii sales tax.

When is Hawaii sales tax due?

Hawaii GET payments are due no later than the 20th day following the reporting period.

What are the Hawaii sales tax thresholds?

Monthly Liability Threshold: greater than $333.34 average monthly tax liability

Quarterly Liability Threshold: $166.67 - $333.33 average monthly tax liability

Annual Liability Threshold: $0 - $166.66 average monthly tax liability

Not sure how to determine your tax filing frequency?

You can review your eCommerce or Point of Sale Software to see the volume of sales you have generated.

Don't worry though! The state will let you know when your due dates change. :)

What if a Hawaii sales tax filing date falls on a weekend or holiday?

The deadline is moved to the next business day, typically the Monday following the weekend or the day after the holiday. Where possible, we of course always suggest filing well before the holiday.

How do I file a Hawaii sales tax return?

Paper: Fill out form G-45 (PDF) and mail to:

Hawaii Department of Taxation

PO Box 1425

Honolulu, HI 96806-1425

Electronic: File online and submit payment via EFT.

How do I correct a Hawaii sales tax return?

The easiest and quickest way to amend a return is to do so on the Hawaiian DOT’s website. To amend by paper [we get it, you hate trees ;p] do the following:

Fill out the same form G-45 (PDF) as usual but fill in the oval to select AMENDED return option at the top:

What happens if I don’t collect sales tax?

While you aren’t legally required to collect GET from a customer during a transaction, you are permitted to.

And whether you do or don’t collect it, you are required to pay it. To avoid a fiscal shortfall, we suggest you always incorporate the GET into your pricing.

Protip: You are still responsible for remitting GET even if you failed to collect it.

What happens if I file or pay my sales tax return late?

Hawaii penalizes failure to file a return on time at 5% per month (or part of a month) on unpaid tax up to a max of 25%. They calculate interest on unpaid taxes and penalties at 2/3rd of 1% per month (or part of a month), beginning with the first calendar day after the date prescribed for payment, whether or not the first calendar day falls on a Saturday, Sunday or legal holiday.

Do I need to file a return if I don’t collect any sales tax in Hawaii?

Yes, Hawaii does require you fill out a form G-45 (or file online) irrespective of what you’ve collected.

If I close my business, do I need to file a final sales tax return?

Yes, Hawaii requires businesses to file a “Final sales tax” return when closing a business.

Does the Hawaii Department of Taxation offer a discount for filing on time?

Nope :(

But we’re proud of you for doing so. In business, timeliness is its own reward. :)

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Now that we covered all our bases for filing and paying sales taxes in the state of Hawaii, you should feel more at ease about the process.

Some things to remember:

• Due dates are important. If anything, file and pay your taxes early.
• There are three payment plans for filing and paying your sales taxes depending on how much you collect in sales tax on average in a month.
• You can file and pay your taxes electronically or by mail (we suggest the former!)
• If you need to amend a return, you may do so electronically or by paper (see above).
• If you don’t collect GET from customer, your company is still liable to pay GET to the state of Hawaii.
• You will have to pay late fees if you fail to file your tax return on time and/or if you fail to make your tax payment on time.
• Even if you collect no GET, you still need to file a return.
• You need to file a “Final sales tax report” when you close your business.

Now, you are ready to file and pay your sales tax in Hawaii. If you have any more questions, feel free to contact us.

Please note: This blog is for informational purposes only and the information is accurate as of 6/18/2019. If you want legal advice on sales tax law for your business, please contact a Tax professional. Keep in mind that sales tax regulations and laws are subject to change at any time. While we strive to keep our blog current, this blog possibly may be out of date by the time you review it.