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23 min read

Hawaii 2023 Sales Tax Guide

Hawaii 2023 Sales Tax Guide

Hawaii Sales Tax in a Word

Aloha, dear reader! Imagine, if you will, you're on a dazzling beach in Hawaii, the golden sun on your face, the rhythmic sound of waves in your ears, and a refreshing pineapple smoothie in your hand. But, hey, before we start packing our bags, let's shift our sunny imaginations towards something just as vibrant but crucial for your business - the sales tax in Hawaii! Welcome to our journey through the vibrant jungle of numbers, clauses, and percentages that form the tropical paradise of Hawaii's sales tax system.

As your trusty guides, we're here to light the tiki torches and lead the way, cheering you on every step of the journey. Rest assured, we're ready to clear away any confusion, and our are maps drawn up to navigate the complexities. We’re ready to help your business master the rhythm of Hawaii's sales tax dance. And hey, who knows? By the end of it all, we might just find a financial luau waiting for us! With that said, hang ten, let's dive in, and ride the wave together towards mastering the intricacies of the Aloha State's sales tax.

 

 

 


Hawaii Sales Tax Contacts

The illustrious Hawaii Department of Taxation, our captains on this Hawaiian tax voyage, are the folks you'll want to get in touch with for all your sales tax needs. Just like the reliable lighthouse guiding ships safely ashore, they are the beacon of knowledge and expertise for anything tax-related in the Aloha State.

Eager to chat with them? You bet they're just as excited to help you navigate these tropical tax waters. You can reach out to them through their website, or if you're more of an old-school, pick-up-the-phone type, you can dial them at 808-587-4242. They also have a toll-free line at 1-800-222-3229, specially made for all of us not lucky enough to already be in Hawaii.

And if you're more of a pen-to-paper kind of person, you can write them a traditional letter addressed to:

Hawaii Department of Taxation

P.O. Box 259

Honolulu, HI 96809

Remember, they are here to help, just like your steadfast surf instructor, ready to help you master the waves of the Hawaiian tax seas. Let's paddle out to those tax breaks together!

 

Do You Have Nexus in Hawaii?

Hear that, dear reader? It's the call of the Hawaiian conch shell, and it's asking a very important question: "Do you have nexus in Hawaii?" But, before you start questioning if you've accidentally stumbled into a sci-fi novel, let's set the record straight. In our world, the tax world, nexus isn't about interstellar travel. It's all about your business connection to a state, and trust us, it's as thrilling as any space adventure!

So, grab your surfboard, as we are about to ride the big wave of understanding your nexus in Hawaii. You see, Hawaii might be an island, but when it comes to sales tax, it's connected to the mainland in ways you might not have considered. Let's journey together to discover if your business has set down roots, or in other words, established a nexus in the tropical paradise that is Hawaii.

Ready? Hang loose, and let's do this!

 

What Creates Sales Tax Nexus in Hawaii?

Great question! Think of sales tax nexus like footprints in the sandy beaches of Hawaii. Each footprint, or in our case, business activity, leaves an impression that could establish your business connection to the Aloha State. So, what are these business activities, you ask? Well, let's unpack our Hawaiian sales tax suitcase together!

Simply put, a physical nexus is created when your business has a tangible, physical presence in the Aloha State. Here are a few scenarios that could plant your business firmly on the Hawaiian ground, like a robust coconut palm:

  1. Business Locations: If your business has a storefront, office, warehouse, or even a pop-up shop, you're basically sending out postcards saying, "Wish you were here... in Hawaii!" That, dear reader, creates a physical nexus.

  2. Employees: Just like the steady beat of Hawaiian drums, having an employee (or more) living and working in Hawaii resonates and creates a physical nexus. This includes salespeople, repair personnel, or any representative acting on your behalf.

  3. Inventory: Stocking your products in a warehouse or a fulfillment center in Hawaii is like stowing away your surfboard for the next big wave. It counts towards a physical nexus.

  4. Property: Owning or leasing property is like leaving your permanent footprints on the island's volcanic black sand beaches. It doesn't matter if it's a small office or a large plot of land; it's a clear sign of physical nexus.

  5. Regular Visits: Regular business trips to Hawaii (sounds nice, doesn't it?) can establish a physical nexus. Think of it as your business catching frequent flights for a Hawaiian vacation.

magine economic nexus as a vibrant online luau, where physical distance doesn't matter. If you're doing a significant amount of business in Hawaii—even if you're operating from the snowy plains of Alaska or the bustling streets of New York—you could still find yourself saying 'Aloha!' to a nexus in Hawaii.

Since 2020, Hawaii has followed the beat of the economic nexus drum. Here's how it breaks down:

  1. Sales Threshold: Just like a surfer catching a giant wave, if your business rides the wave of $100,000 in sales in Hawaii over the course of a year, congrats! You've met the sales threshold and created an economic nexus.

  2. Transaction Threshold: Or, if your business makes 200 separate transactions with customers in Hawaii in a year, that's like sending out 200 invites to your online luau. And you've guessed it; this also establishes an economic nexus.

Whichever of these two thresholds your business crosses first in a year, that's your ticket to economic nexus in Hawaii.

This might seem like paddling out into uncharted waters, but fear not! We're here, right by your side, ready to help you navigate these rolling waves. Just like the dependable North Star, we're here to guide you and your business through the tropical trade winds of Hawaii's tax laws. Keep those questions coming, and let's navigate this adventure together!

Affiliate nexus in Hawaii is created when an out-of-state retailer has an affiliate or representative in Hawaii that participates in a mutual merchandise return and loyalty points program with the out-of-state retailer.

The Hawaii Department of Taxation (HDT) defines an affiliate as a person or entity that is directly or indirectly controlled by the retailer, or that is under common control with the retailer. A representative is a person or entity that is authorized to act on behalf of the retailer.

When an affiliate or representative in Hawaii participates in a mutual merchandise return and loyalty points program with an out-of-state retailer, it is considered to be doing business in Hawaii. This means that the retailer has nexus in Hawaii and is required to collect and remit sales tax on all sales made to Hawaii residents.

The HDT has issued a number of rulings that have clarified the definition of affiliate nexus in Hawaii. In a 2010 ruling, the HDT held that an out-of-state retailer had affiliate nexus in Hawaii when its in-state affiliate participated in a merchandise exchange program with the retailer. In a 2012 ruling, the HDT held that an out-of-state retailer had affiliate nexus in Hawaii when its in-state affiliate participated in a loyalty points program with the retailer.

The HDT's rulings on affiliate nexus have been controversial. Some retailers have argued that the rulings are too broad and that they create an unfair competitive advantage for in-state retailers. The HDT has defended its rulings, arguing that they are necessary to ensure that all retailers that sell to Hawaii residents are subject to sales tax.

If you are an out-of-state retailer that sells to Hawaii residents, you should be aware of the possibility of affiliate nexus. You should consult with a tax advisor to determine if your business has affiliate nexus in Hawaii.

Hawaii does not have a click-through nexus law. Click-through nexus is a type of economic nexus that arises when an out-of-state retailer has an agreement with a person in the state to refer potential customers to the retailer's website in exchange for a commission.

Hawaii's economic nexus law requires out-of-state retailers to collect and remit sales tax on sales made to Hawaii residents if the retailer has either:

  • Gross revenue from Hawaii sales of $100,000 or more; or

  • 200 or more separate transactions from sales into the state in the current or immediately preceding calendar year.

As a result, Hawaii retailers do not need to worry about click-through nexus. However, retailers that do business in Hawaii should be aware of the state's economic nexus law and take steps to ensure that they are in compliance.

Marketplace nexus is a type of economic nexus that arises when an out-of-state retailer uses a marketplace facilitator to sell to customers in a state. A marketplace facilitator is a company that provides a platform for sellers to sell their products online.

Hawaii's marketplace nexus law requires marketplace facilitators to collect and remit sales tax on sales made through their platform if the marketplace facilitator has either:

  • Gross revenue from Hawaii sales of $100,000 or more; or

  • 200 or more separate transactions from sales into the state in the current or immediately preceding calendar year.

The marketplace facilitator is responsible for collecting and remitting sales tax on all sales made through its platform, regardless of whether the seller is registered to do business in Hawaii.

 

Hawaii Sales Tax Registration

Registration is your business's formal introduction to the Hawaii Department of Taxation, akin to saying "Aloha, we're here to do business!" It's like getting your beach permit, your ticket to set up your beach umbrella (or your business, in our case) on Hawaii's sunny sands. And just as a beach day is full of fun, this process is easier than you might think! So, let's lace up our hiking boots, fill our water bottles, and embark on the scenic trail to Hawaii sales tax registration. We're right here with you, every step of the way. Let's get started, shall we?

 

How to Register for Sales Tax in Hawaii

Oh, the thrill of starting a new adventure! Registering for sales tax in Hawaii is like embarking on a scenic island hike, and guess what? We've got the perfect trail map to guide you. So, fasten your seatbelts, it's time to fly!

Step 1: Gather Your Essentials: Just like packing your beach bag before a sun-soaked day on the sands, you'll need to have some information handy. This includes your Federal Employer Identification Number (FEIN), Social Security Number (SSN), and details about your business such as the structure, ownership, and the nature of your sales.

Step 2: Visit the Hawaii Department of Taxation Website: It's like your personal travel portal to all things tax-related in the Aloha State! Navigate to the business registration section to start your journey.

Step 3: Complete the BB-1 Packet: This is your golden ticket, your application for a Hawaii Tax ID. Think of it as filling out a postcard to the state, sharing the story of your business. It's an online form, making it easier than ordering a tropical smoothie!

Step 4: Get Your License: Once your application is approved (hooray!), you'll receive your Hawaii General Excise Tax (GET) license, which is Hawaii's version of a sales tax license. It's like getting your very own Hawaiian lei, symbolizing your welcome into the business community.

Step 5: Celebrate and Get Ready: Celebrate your success! You've just climbed the majestic peak of Mauna Kea! Once you have your license, it's time to start collecting sales tax. Remember, the Hawaii GET is a pass-through tax, which means it's collected from your customers and then passed on to the state.

Just like a friendly tour guide, we're here to help you navigate every twist and turn of this journey. With each step, you're not just getting closer to registering for sales tax in Hawaii, you're also laying a solid foundation for your business success in the beautiful Aloha State. Ready to continue our adventure together? Let's go!

 

How Much Does it Cost to Register for a Hawaii Sales Tax License?

It costs $20 to register for a sales tax license in Hawaii. This fee is non-refundable.

If you are a new business, you may be eligible for a waiver of the registration fee. To qualify for the waiver, you must meet the following criteria:

  • You must be a new business that has not been in operation for more than one year.

  • You must have gross receipts of less than $50,000 in the previous year.

  • You must be a sole proprietorship, partnership, or limited liability company.

To apply for the waiver, you must complete the Sales Tax License Application form and check the box indicating that you are requesting a waiver of the registration fee. You must also attach a copy of your business tax identification number (TIN) and a copy of your most recent income statement.

The Hawaii Department of Taxation will review your application and notify you of their decision within 30 days.

 

Do I Need a Federal Tax ID Number or EIN to Register for a Hawaii Sales Tax License?

You're asking the right questions. Let's dive into this together, shall we? Do you need a Federal Tax ID Number or EIN to register for a Hawaii sales tax license? That's a resounding "Yes"! Think of your EIN as your business's passport. It's a unique identification number that lets Uncle Sam know who you are.

Applying for a Hawaii sales tax license without an EIN would be like trying to board a flight to Honolulu without a boarding pass. So, before you start dancing the hula with the Hawaii Department of Taxation, make sure you've got your EIN handy.

Now, if you're a sole proprietor, you might be able to use your Social Security Number instead. But let's face it, having an EIN is like having a fancy VIP pass – it adds an extra layer of identity protection and credibility to your business.

So whether you're a seasoned entrepreneur or just starting your business journey, grab your EIN and let's continue this exciting adventure through the vibrant landscape of Hawaiian tax regulations! We're here to guide you every step of the way. Ready? Let's paddle out to the next wave of information!

 

Which Agencies in Hawaii Might I Need to Register With Additionally?

Aloha! As we navigate the waves of Hawaiian business setup, it's important to know that there might be a few other stops on our journey, beyond the Hawaii Department of Taxation. Think of it as your grand island tour of agencies! These are the ones you might need to register with, depending on the nature of your business:

  1. Hawaii Department of Commerce and Consumer Affairs (DCCA): Just like a trusty surfboard, the DCCA can be essential for your business ride. If your business is a corporation, LLC, partnership, or a sole proprietorship with a trade name, you'll need to register with them.
  2. Hawaii Department of Labor and Industrial Relations (DLIR): If you have employees, it's time for a pit-stop at the DLIR. Think of it as the lifeguard of your business, keeping an eye on unemployment insurance, workers' compensation, and more.
  3. County Offices: Don't forget about the local scene! Depending on where your business is located, you might need to check in with your county office for permits or licenses. It's like making friends with the locals at your favorite beach.
  4. Federal Agencies: On the federal side of things, you might need to register with the Internal Revenue Service (IRS) or other agencies, depending on your business type and operations. It's like sending a "Wish you were here!" postcard to the mainland.

Remember, your business is as unique as a Hawaiian sunrise, and these might not be the only agencies you need to register with. Always check with a trusted advisor or professional for your specific situation. But don't fret, we're here too, ready to hula dance through this process alongside you!

Ready for the next part of our journey? Let's go!

 

 

Collecting Sales Tax in Hawaii

Now that we've navigated the tropical trails of sales tax registration in Hawaii, it's time to embark on our next adventure—collecting sales tax! Think of it as weaving your own traditional Hawaiian lei. Each flower represents a transaction, and as you string them together, you're creating something beautiful, while also following the traditions (or tax laws) of the land.

In Hawaii, the process is a bit unique. Instead of the typical sales tax you find in many states, we have the General Excise Tax (GET), which is a bit like the state's own version of a hula dance—it has its own rhythm and steps.

Just like the warm Hawaiian sun that touches everyone on the islands, GET applies to virtually all business activities. And it's not just for the locals, oh no! Whether your business is based on the sandy beaches of Maui, or you're riding the waves of economic nexus from a distant shore, once you've established nexus, it's time to collect.

So, grab your sunscreen, put on your shades, and let's dive into the sparkling ocean of information about collecting sales tax in Hawaii. Together, we'll ride the waves of GET, and make sure your business stays as balanced as a seasoned surfer! Ready? Let's catch this wave!

 

How to collect sales tax in Hawaii

Ready for a lesson in the art of collecting sales tax, Hawaiian-style? Great! Here's your step-by-step guide to becoming a pro at collecting the General Excise Tax (GET) in Hawaii. Remember, each step is like a new hula move, and once you've got them all down, you'll be dancing like a local in no time.

Step 1: Know Your Rates: The first rule of Hawaiian tax collection is to know your rates, just as a surfer knows the tides. The state GET rate is 4%, but in Oahu, there's a county surcharge of 0.5%, making the total rate 4.5%. It's like adding a little extra pineapple to your Hawaiian pizza – it's just how things are done here.

Step 2: Apply GET to Sales: Remember that GET is applied to virtually all business activities. Whether you're selling handmade ukuleles or providing surf lessons, you're likely subject to the GET. It's as all-encompassing as the Pacific Ocean that surrounds these beautiful islands.

Step 3: Include GET in Pricing: GET is a 'gross' tax, meaning it's applied to the gross income of the business. Many businesses choose to pass this cost on to customers by including it in the sales price – like folding in a dollop of coconut cream into a tropical dessert.

Step 4: Collect at Point of Sale: Whenever you make a sale, ensure you're collecting the appropriate amount of GET. It's as crucial as a lifeguard keeping a watchful eye on beachgoers.

Step 5: Keep Accurate Records: Keep track of what you collect like a treasured map marking where you've buried your pirate gold. This is crucial for when it's time to file your taxes.

Step 6: File and Pay On Time: Once you've collected the tax, make sure to file your tax returns and remit the tax on time. It's like catching the perfect wave – timing is everything!

Collecting sales tax in Hawaii is an important part of doing business in the Aloha State. But with a little practice (and maybe some tropical music playing in the background), you'll be dancing the hula of Hawaii's GET in no time. Remember, we're here to dance along with you every step of the way! So, keep those questions coming, and let's continue this adventure together!

 

What Sales are Subject to Sales Tax in Hawaii?

Just like a lei is made up of many different types of flowers, the General Excise Tax (GET) in Hawaii applies to a colorful assortment of transactions. In the spirit of 'ohana, or family, Hawaii's GET is all-inclusive, hugging just about every business activity in its warm, tropical embrace.

Here are some of the key types of sales subject to GET:

  1. Goods: Selling a vibrant Hawaiian shirt or a hand-carved ukulele? From retail items to wholesale goods, the sale of most tangible products is subject to GET, much like how every grain of sand counts on Hawaii's beautiful beaches.

  2. Services: If you're providing a service, from spa treatments to surf lessons, your earnings are also part of the GET 'ohana.

  3. Rentals: Whether you're renting out a beachfront bungalow or a moped for tourists to explore the island, these transactions are under the GET umbrella, too!

  4. Digital Products: Yes, even in paradise, the digital world is embraced. If you're selling digital products like e-books, online courses, or software, you're part of the GET family.
  5. Commissions: Whether you're a real estate agent closing a deal on a dreamy Hawaiian home, or an artist selling your tropical paintings on commission, these earnings are also subject to GET.

But remember, just like Hawaii's diverse ecosystem, there are exceptions and unique cases. Certain transactions, like the sale of prescription medicine and certain types of food, for example, might not be subject to the GET or could be taxed at a different rate. So, always consult with a trusted tax advisor or professional to ensure your hula dance with GET is in perfect rhythm.

Still have questions or want to learn more? No worries! We're here to navigate these tropical tax waters with you, ensuring your journey is as smooth as a sail across Waikiki Beach. Let's keep the adventure going!

 

Is Software as a Service (SaaS) taxed in Hawaii?

Yes, software as a service (SaaS) is taxed in Hawaii. SaaS is considered a taxable service in Hawaii, and is subject to the state's 4.4% general excise tax (GET).

The Hawaii Department of Taxation (HDT) defines SaaS as "a software application that is hosted by a third-party provider and accessed by users over the internet." SaaS can include a wide range of software applications, such as CRM software, accounting software, and productivity software.

The HDT has issued a number of rulings that clarify the definition of SaaS and the application of GET to SaaS transactions. In a 2016 ruling, the HDT held that SaaS is subject to GET even if the software is licensed to the user rather than sold to the user. In a 2017 ruling, the HDT held that SaaS is subject to GET even if the software is used by the user to access or process data that is stored on the user's computer.

If you are a SaaS provider and you sell or license your software to customers in Hawaii, you are required to collect GET on the sales or licenses. You are also required to file GET returns with the HDT on a monthly or quarterly basis, depending on the amount of GET collected.

If you are a business that sells SaaS, you should monitor the situation closely and consult with a tax advisor if you have any questions. 

 

What is Exempt from Hawaii Sales Tax?

Just like the islands of Hawaii each have their unique charm, not all sales are treated the same under the General Excise Tax (GET). In the spirit of aloha, let's uncover those lucky few transactions that get to slip off their sandals and enjoy the sunset without the GET tagging along.

Here's a glimpse at some of the types of transactions commonly exempt from Hawaii's GET:

1. Prescription Medicine and Prosthetic Devices: Just like a healthful breeze coming off the Pacific, prescription medicines and prosthetic devices are exempt from the GET, taking a bit of the financial sting out of healthcare needs.

2. Certain Types of Food: Much like a local luau, there are many delicious dishes, but not all are treated equally. Some food products are exempt from the GET, such as those purchased with food stamps.

3. Some Agricultural Items: If you're selling unprocessed agricultural products that were grown in Hawaii, you're in luck. These items are often exempt from GET. It's as refreshing as finding a ripe mango in your own backyard!

4. Certain Nonprofit Organizations: Recognized nonprofit organizations often enjoy a GET exemption on their income, as long as it's related to their mission. It's Hawaii's way of saying "mahalo" for their contributions to the community.

5. Some Leases: Depending on the type and length, some leases are exempt from the GET, allowing for a bit more wiggle room in the budget.

6. Interstate and Foreign Commerce Sales: Just as Hawaii welcomes visitors from around the world, some transactions involving interstate or foreign commerce can be exempt from the GET.

While these exemptions might seem as clear as a Hawaiian bay on a calm day, remember that the waters of tax law can sometimes get a little choppy. It's always wise to consult with a tax professional to ensure you're navigating them correctly. So, grab your snorkel, and let's dive deeper into the world of Hawaii taxes together! We're here to make your journey as smooth as a peaceful Pacific swell.

Ready for the next wave of knowledge? Let's go!

 

Who is Eligible for Hawaii Sales Tax Exemptions?

Much like earning an invite to an exclusive luau, being eligible for Hawaii's sales tax exemptions requires certain criteria to be met. It's not an open beach party, but it sure is worth exploring!

1. Nonprofit Organizations: Much like a trusty lifeguard, nonprofits serve the community, and Hawaii gives back to them, too! Nonprofits that have a federal 501(c)(3) status may qualify for GET exemptions, but they must apply and be approved by the Hawaii Department of Taxation.

2. Certified or Licensed Health Professionals: Health professionals who provide prescription medications or prosthetic devices could be eligible for exemptions when these items are being used for treatments. It's like the relief of aloe on sunburn – a small break from the heat!

3. Agricultural Producers: If you're growing pineapples or raising shrimp, you might be in luck! Unprocessed agricultural products grown in Hawaii could be exempt from GET.

4. Certified Common Paymaster: If a group of related entities use a common paymaster for payroll, they might be able to dodge the GET on amounts paid to the common paymaster. It's all about keeping it in the family!

5. Qualified Businesses in Enterprise Zones: Businesses operating in designated Enterprise Zones can receive various benefits, including GET exemptions. It's like finding a hidden oasis in paradise!

Remember, this is a general guide, kind of like a map to the stars' homes. Your business is unique and may have different eligibility for exemptions. Always consult with a tax professional to make sure you're taking the right path down the palm-lined road of tax compliance.

As we navigate these Hawaiian tax waters together, keep those questions coming. We're here to make your journey as enjoyable as a sunset luau! What's next on our adventure? Let's find out!

 

What Should I Do If My Customer is Exempt from Sales Tax in Hawaii?

Here are the steps you should follow when dealing with a sales tax-exempt customer in Hawaii:

Step 1: Get Proof of Exemption: Just like you'd ask a parrot to say "Aloha" before believing it could talk, you'll want proof of exemption from your customer. This usually comes in the form of a Hawaii Department of Taxation Form G-17, the Tax Exemption Certificate.

Step 2: Verify the Exemption: Have a close look at that certificate like it's a treasure map. Make sure all the information is accurate and up to date. If it's expired or contains errors, the exemption won't be valid, much like a map leading to an empty treasure chest.

Step 3: Keep a Copy: Found a valid certificate? Great! Make a copy of it and keep it in your records. It's like keeping a shell from every beach you visit - a memento and proof of your journey.

Step 4: Do Not Collect Tax: When a customer presents a valid exemption certificate, you do not collect the General Excise Tax (GET) on their eligible purchases. It's like letting them enjoy the beach without kicking sand in their face.

Step 5: Report the Exemption: When filing your GET returns, you'll report these tax-exempt sales. They're part of the story of your business, like footprints in the sand, and they should be included.

Remember, handling tax exemptions correctly is as crucial to your business as a sturdy canoe is to a voyager. When in doubt, always consult a tax professional or trusted advisor. Your journey in the land of sales tax can be challenging, but don't worry! We're in the same canoe, paddling alongside you every step of the way.

 

What Happens If I Lose a Hawaii Sales Tax Exemption Certificate?

Losing a Hawaii sales tax exemption certificate can feel like misplacing your snorkel just as you're about to explore a vibrant coral reef. But, don't worry! There's a lifeline for this situation too.

Step 1: Don't Panic! Losing an exemption certificate is like getting a little sand in your beach picnic - it's not ideal, but it's certainly manageable.

Step 2: Contact Your Customer: Much like calling a friend for a forgotten sunscreen, reach out to the customer who provided the certificate. Most will be understanding and able to provide a new copy of the exemption certificate for your records.

Step 3: Keep Good Records: Keep a record of your communication and efforts to retrieve a new copy. It's like leaving a trail of seashells, proof of your journey in case you're asked about it later.

Step 4: Consult with a Tax Professional: When dealing with tax matters, it's always a good idea to consult a tax professional, just like a reliable compass guiding you to the right path.

Remember, maintaining accurate records is as essential to your business as a sturdy surfboard is to a surfer. It helps you ride the waves smoothly and avoid wipeouts.

But hey, every adventurous explorer hits a bump once in a while, and that's why we're here - to make sure you're back on your board and catching those tax waves again in no time! So, keep that sunblock handy and your adventurous spirit high.

 

Filing and Paying Sales Taxes in Hawaii

Welcome to the next important phase in our discussion on Hawaii sales taxes - filing and payment. After diligent collection and record-keeping, it's time to ensure that all information is correctly reported and payments are made to the Hawaii Department of Taxation. This part of the process is critical and requires careful attention to detail, just as you've been diligent in every step thus far. Ready to dive into the nuances of filing and paying your sales taxes in Hawaii? Let's navigate this together, ensuring that every task is completed accurately and efficiently.

 

When to File and Pay Sales Tax in Hawaii

Next, we'll delve into an important topic that deserves its own spotlight: understanding when to file and pay your sales taxes in Hawaii. This step is a cornerstone of successful tax compliance, akin to being punctual for a crucial business meeting. Timing is everything and knowing the due dates for filing and payment ensures you stay in the good graces of the Hawaii Department of Taxation. So, let's synchronize our watches, mark our calendars, and learn how to maintain timeliness in the realm of sales taxes in the Aloha State. Join us as we dive deeper into the world of tax deadlines and payment schedules!

If your estimated annual GET liability is $4,000 or more, you'll be required to file monthly returns.

If your estimated annual GET liability is at least $2,000 but less than $4,000, then your business will fall into the quarterly filing category.

If your estimated annual GET liability is less than $2,000, you'll only need to file semiannually.

 

What If a Hawaii Sales Tax Filing Date Falls on a Weekend or Holiday?

Great question! It's like planning a beach day and realizing it might rain - you need a contingency plan. If a Hawaii sales tax filing due date falls on a weekend or holiday, don't worry, the Hawaii Department of Taxation has you covered. You are granted an extension until the next business day to file your return and make your payment. So, you get a little extra time, much like a beautiful Hawaiian sunset lingering just a bit longer over the Pacific. Just ensure to file and pay by the end of that next business day to keep your tax voyage sailing smoothly. 

 

How Do I File a Hawaii Sales Tax Return?

Filing a Hawaii sales tax return, or more accurately, the General Excise Tax (GET) return, involves a series of steps that are as straightforward as following a well-marked hiking trail. Here's a step-by-step guide to ensure you're on the right path:

Step 1: Gather Your Information: Before you set out, make sure you have all your necessary information handy. This includes your gross sales, sales tax collected, and any tax-exempt sales you've made.

Step 2: Access the Hawaii Tax Online system: The Hawaii Department of Taxation makes it easy for you to file online through the Hawaii Tax Online system. It's like having a personal tour guide for your tax filing journey!

Step 3: Complete the Form: You'll be filling out Form G-45, the Periodic General Excise / Use Tax Return. Like filling out a postcard, make sure all your information is correct before you send it off.

(Need a little refresher on use tax? Check out our sales tax vs use tax blog here.)

Step 4: Submit Your Return: After double-checking your figures and ensuring everything is accurate, submit your return. It's as satisfying as reaching the end of a beautiful Hawaiian trail.

Step 5: Make Your Payment: Don't forget this crucial step. If you owe tax, be sure to make your payment. It's the final step, like taking off your hiking boots after a long, rewarding hike.

Remember, every business is unique, and these steps may vary based on your specific circumstances. It's always a good idea to consult with a tax professional or the Department of Taxation if you have any questions or concerns. No matter where you are in your tax journey, remember, we're here to support you!

 

Late Filing Penalty

A late filing penalty of 5% of the amount of sales tax due for each month that the return is late, up to a maximum of 25%.

 

Late Payment Penalty

A late payment penalty of 1% of the amount of sales tax due for each month that the payment is late, up to a maximum of 25%.

 

Interest 

Interest is charged on any unpaid sales tax at a rate of 2/3 of 1% per month, or part of a month.

 

Hawaii Sales Tax Discounts

Yes, Hawaii offers discounts for businesses who file and pay sales tax on time or early.

The Hawaii Department of Taxation offers a 2% discount for businesses who file and pay their sales tax on time. The discount is available for both monthly and quarterly filers.

 

To qualify for the discount, businesses must:

  • File their sales tax return on time.

  • Pay their sales tax on time.

  • Not owe any penalties or interest.

The discount is applied to the amount of sales tax due. For example, if a business owes $1,000 in sales tax, and they file and pay their return on time, they will only owe $980.

 

The Hawaii Department of Taxation also offers a 1% discount for businesses who file their sales tax return electronically. The discount is available for both monthly and quarterly filers.

To qualify for the discount, businesses must:

  • File their sales tax return electronically.

  • Pay their sales tax on time.

  • Not owe any penalties or interest.

The discount is applied to the amount of sales tax due. For example, if a business owes $1,000 in sales tax, and they file and pay their return electronically, they will only owe $990.

 

Hawaii Sales Tax Holidays

No, Hawaii does not have sales tax holidays.

 

 

5 Tips to Avoid Common Mistakes When Filing Hawaii Sales Tax Returns

When it comes to filing Hawaii sales tax returns, a little foresight can save you from stumbling into common pitfalls. Think of these tips as your trail markers, helping you navigate the terrain smoothly and confidently. Ready? Let's lace up those hiking boots and embark on this journey of discovery!

Tip 1: Double-Check Your Math: Errors in calculations are like unexpected roots on a hiking trail, easy to trip over if you're not careful. Always double-check your figures before submitting your return to avoid discrepancies.

Tip 2: Keep Up with Due Dates: Like catching the perfect wave, timing is everything. Missing filing deadlines can result in penalties and interest. Mark your calendar and set reminders to ensure you're always on time.

Tip 3: Understand Nexus Rules: Like knowing the local flora and fauna, understanding nexus rules is essential for your business. Make sure you're aware of physical, economic, and affiliate nexus rules specific to Hawaii.

Tip 4: Maintain Accurate Records: Detailed record-keeping is the compass that guides your tax journey. Keeping accurate records of all your transactions, including exempt sales, is crucial for accurate filing and in case of audits.

Tip 5: Don't Ignore Exemptions: Tax exemptions are like hidden waterfalls on your trail – it pays to know where they are. Be aware of what's exempt from sales tax in Hawaii and make sure you're applying these rules correctly.

Filing your Hawaii sales tax return doesn't have to feel like a treacherous climb. With these tips in your backpack, you're well-equipped to navigate the path with ease. And remember, we're right here with you, every step of the way!

 

 


 

Ready to work with a Hawaii sales tax expert?

We've love to work with you!

 👉  Book a call here  👈

 

 


 
Have sales tax in more than one state?

Check out All of our Sales Tax Guides

Alabama Sales Tax Guide

Hawaii Sales Tax Guide

Massachusetts Sales Tax Guide

New Mexico Sales Tax Guide

South Dakota Sales Tax Guide

Alaska Sales Tax Guide (N/A)

Idaho Sales Tax Guide

Michigan Sales Tax Guide

New York Sales Tax Guide

Tennessee Sales Tax Guide

Arizona Sales Tax Guide

Illinois Sales Tax Guide

Minnesota Sales Tax Guide

North Carolina Sales Tax Guide

Texas Sales Tax Guide

Arkansas Sales Tax Guide

Indiana Sales Tax Guide

Mississippi Sales Tax Guide

North Dakota Sales Tax Guide

Utah Sales Tax Guide

California Sales Tax Guide

Iowa Sales Tax Guide

Missouri Sales Tax Guide

Ohio Sales Tax Guide

Vermont Sales Tax Guide

Colorado Sales Tax Guide

Kansas Sales Tax Guide

Montana Sales Tax Guide (NA)

Oklahoma Sales Tax Guide

Virginia Sales Tax Guide

Connecticut Sales Tax Guide

Kentucky Sales Tax Guide

Nebraska Sales Tax Guide

Oregon Sales Tax Guide (N/A)

Washington Sales Tax Guide

Delaware Sales Tax Guide (N/A)

Louisiana Sales Tax Guide

Nevada Sales Tax Guide

Pennsylvania Sales Tax Guide

West Virginia Sales Tax Guide

Florida Sales Tax Guide

Maine Sales Tax Guide

New Hampshire Sales Tax Guide (NA)

Rhode Island Sales Tax Guide

Wisconsin Sales Tax Guide

Georgia Sales Tax Guide

Maryland Sales Tax Guide

New Jersey Sales Tax Guide

South Carolina Sales Tax Guide

Wyoming Sales Tax Guide

 

And don't forget to check out our blog about Economic Nexus, which serves as an invaluable resource for businesses who have sales that are subject to sales tax. 

 

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This blog is for informational purposes only and the information is accurate as of 2023-06-19. If you want legal advice on sales tax law for your business, please contact a State and Local Tax (SALT) 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.

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