SALES TAX 101 for Hawaii

By December 3, 2018 Hawaii

The 10 Basics Every Hawaii Business Should Know About SALES TAX

What is Sales Tax in Hawaii?

Hawaii imposes a general excise tax instead of sales tax. The rate is between 4% throughout most of Hawaii and 4.5% on Oahu.

Are All Goods and Services Taxable?

Yes

How Do I Know What’s Taxable and What’s Not?

The following link can help you determine what is taxable and what isn’t in Hawaii:  http://tax.hawaii.gov/geninfo/get/

Who Pays Sales Tax?

Consumers do not pay the GET.  Merchants are responsible for paying GET whether they charge their customers for it or not.

What Am I Responsible For?

You are required to report and send the GET to the State on-time and in-full.

When Is My Sales Tax Payment Due in Hawaii?

In Hawaii, GET is due the 20th day of the month following the close of the tax period. Filing frequency is determined by the state.

How Do I Know How Much Sales Tax to Charge? 

General excise tax rates in Hawaii are assessed on all business activities.  The tax rate is .15% for Insurance Commission, .50% for Wholesaling, Manufacturing, Producing, Wholesale Services, and Use Tax on Imports For Resale, and 4% and 4.5% for all others. Click here for more information.  The final and definitive answer is always the sales tax rate posted on the State Department of Revenue website.  Rates posted on the web are often not up-to-date and incorrect. It’s always the merchant’s responsibility to charge the correct sales tax rate.

Who Gets the Sales Tax Money?

In Hawaii the general excise tax gets paid directly to the State.

How Do I Manage Tax Exempt Sales?

Sales to tax-exempt customers are generally subject to GET. There are no GET exemptions based on a customer’s tax-exempt status. As a result, Hawaii does not issue tax exemption certificates to tax‐exempt organizations, government agencies, or credit unions to exempt their purchases from Hawaii businesses.

What if I Forget to Pay or Spend the Money and Can’t Pay?

Hawaii  has severe penalties for missing tax payments. You can find the penalties for late payments here. If sales tax goes unpaid, states will seize the assets of the business or owner and auction them off to pay the debt.  In extreme cases owners will be prosecuted and sent to jail. Even if the business closes, sales tax is a personal liability that will follow the owner until paid.

Hawaii Tax Online

TAX RATE: The current Hawaii general excise tax (GET) rate is between 4% and 4.5% on goods and services.

Hawaii GET HELP: (808) 587-4242

This resource page is for informational purposes only.  If you have further questions regarding sales tax please contact DAVO support at 888-659-8432 or consult your tax adviser.

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