Hawaii Business Taxes at a Glance
Hawaii's tax system centers on the general excise tax (GET), which applies to almost every business transaction in the state, including services. Visitors' lodging is taxed separately, and that tax increased in 2026. Hawaii also taxes goods imported for use in the state, and employers must provide temporary disability insurance and health coverage. BOMCAS helps Hawaii businesses and individuals manage these requirements.
The General Excise Tax
The GET is a tax on a business's gross income from doing business in Hawaii. It is imposed on the business, not the customer, though businesses can pass it on as a visible charge. Unlike most sales taxes, it applies to services, rents, commissions, and professional fees, as well as retail sales. Most counties add a surcharge.
Two features matter in practice:
- Wholesale rate: sales to other businesses for resale, and certain services passed through to a final customer, are taxed at a much lower rate than retail sales.
- Pyramiding: because GET applies at each stage, the tax can build up in the price of goods and services. Hawaii's wholesale rate reduces that effect but does not remove it.
Every business with Hawaii income, including landlords and professionals, needs a GET license. Returns are filed periodically with an annual reconciliation. We help businesses register, apply the right rates and county surcharges, and file returns.
Use Tax on Imports
Hawaii imposes a use tax on goods, services, and contracting imported into the state for use, consumption, or resale. Since much of Hawaii's supply comes from the mainland, use tax affects most businesses. Goods imported for resale at retail are taxed at a lower rate, while goods imported for the business's own use are taxed at the higher rate. We track imports during bookkeeping and report use tax on GET returns.
Transient Accommodations Tax
Hotel rooms, vacation rentals, and other short-term lodging in Hawaii are subject to the transient accommodations tax (TAT), in addition to GET. Under Act 96, sometimes called the "green fee," the state TAT rate increased to 11% on January 1, 2026, with revenue directed toward climate resilience and environmental programs. Counties also impose their own TAT. Timeshare occupancy is taxed under related rules.
Vacation rental owners and property managers must hold TAT and GET licenses, display license numbers in advertising, and file regularly. We help owners register, file, and keep rental income and expenses organized for federal and Hawaii returns.
Individual Income Tax
Hawaii taxes residents on all income and nonresidents on Hawaii-source income, using many graduated brackets with relatively high top rates. Legislation in 2024 increased the standard deduction and widened the brackets in phases, reducing tax for many residents over several years. Hawaii taxes long-term capital gains at a lower maximum rate than ordinary income.
Residency questions are common in Hawaii, including for military families, people who split time between Hawaii and the mainland, and remote workers. We prepare Hawaii returns and part-year and nonresident filings.
Military Families and Part-Year Residents
Many people live in Hawaii because of military service. Under federal law, service members stationed in Hawaii generally keep their home state of legal residence, and spouses may be able to elect the same state. Income that does not come from military pay, such as a spouse's side business or rental income from Hawaii property, can still be taxable in Hawaii. We help military families sort out which state taxes which income and file the right returns.
Selling Hawaii Real Estate as a Nonresident
When a nonresident sells Hawaii real property, the buyer generally must withhold a percentage of the amount realized and send it to the Department of Taxation under the Hawaii Real Property Tax Act (HARPTA), unless an exemption or waiver applies. The withholding is a prepayment, not the final tax. Sellers then file a Hawaii nonresident return to report the actual gain and claim any refund. We help sellers estimate the tax, request waivers where appropriate, and prepare the return.
Corporate Income Tax
A corporation with nexus in Hawaii apportions its income and pays Hawaii corporate income tax on its share. Partnerships and S corporations file Hawaii returns and may withhold for nonresident owners. Pass-through entities in Hawaii can elect to pay tax at the entity level. We prepare corporate and entity returns and evaluate the election.
Payroll: TDI, Prepaid Health Care, and More
Hawaii payroll has requirements that most states do not:
- Temporary disability insurance (TDI): employers must provide coverage for non-work-related disability, and may withhold a limited amount from employees
- Prepaid Health Care Act: employers must provide health insurance to eligible employees who work a minimum number of hours per week
- Unemployment insurance reported to the Department of Labor and Industrial Relations
- State income tax withholding
We set up payroll for these requirements, file reports, and reconcile them to the books.
Visitors, Vacation Rentals, Builders, and Farms
- Tourism and hospitality: GET, TAT, and payroll for large staff
- Real estate and vacation rentals: TAT, GET on rents, and property records
- Construction: GET on contracting, use tax on imported materials, and job costing
- Agriculture: coffee, macadamia, and diversified farming, with farm reporting
- Professional services: GET on fees and pass-through billing at the wholesale rate
Separating Retail, Wholesale, and Imports
Hawaii bookkeeping should separate retail and wholesale income for GET, track imports for use tax, and record lodging income for TAT. Our bookkeeping is set up so these figures come straight from the ledger at filing time.
Contact BOMCAS About Hawaii
Vacation rental owners adjusting to the higher TAT, contractors sorting out GET on subcontracts, and employers setting up TDI and prepaid health care can contact BOMCAS for a remote review. City and service pages for Hawaii will be added under this section. See the BOMCAS home page and our United States services for more. This page is general information and not advice for your specific situation.
Talk to BOMCAS About Your Hawaii Taxes
Have a question about your Hawaii filings, payroll or bookkeeping? Contact BOMCAS or use the contact form below, and we will get back to you as soon as possible. You can also browse all United States services.