As an e-commerce seller, you will need to collect sales tax in Hawaii if you have:
(1) $100,000 in gross income or gross proceeds from sales or 200 or more transactions in the current or immediately preceding calendar year (economic nexus),
(2) Physical presence in Hawaii (physical nexus).
The state of Hawaii does not have a typical sales tax. Instead, they have a general exercise tax (GET) that is intended to cover the privilege of doing business in Hawaii. A seller is responsible for remitting GET regardless of whether or not they collected the GET on a transaction.
Below, we will highlight some of the basic provisions of Hawaii sales tax law and GET.
What is the tax rate range for Hawaii?
State: Hawaii’s general GET rate is 4%. The tax rate is 0.15% for Insurance Commission, 0.5% for Wholesaling, Manufacturing, Producing, Wholesale Services, and Use Tax on Imports For Resale
Local: Local jurisdictions can range from 0% 0.5%.Hawaii General Excise and Use Tax Report
Do you have physical or economic nexus in Hawaii?
Physical nexus. Certain business activities create physical nexus in Hawaii. Most businesses with any sort of presence in Hawaii (employee, warehouse, property, etc.) will likely be subject to general exercise tax (GET).
Hawaii's General Excise Tax Law
Economic nexus. Hawaii recognizes economic nexus for any vendor with $100,000 or more in gross income or gross proceeds or 200 or more separate transactions from sales into the state in the current or immediately preceding calendar year.
- Gross income or gross proceeds includes sales of tangible personal property, services, and intangible property
- Gross sales include sales you make through a marketplace facilitator if the marketplace facilitator is engaged in business in Hawaii and the marketplace seller sends the property into Hawaii, either directly to the purchaser or to a marketplace facilitator for resale
Department of Taxation Announcement No.2018-10 and Tax Information Release No. 2019-03 (Revised)
What are examples of sales of taxable items?
- Tangible personal property, unless an exemption applies
- Wholesale activities (rate is 0.5%)
- Rental of personal or real property
- Software as a Service (SaaS)
What are examples of sales of nontaxable/exempt items?
- Medical goods
- Some specific tangible goods
Are there any sales tax holidays?
Hawaii does not currently recognize any scheduled sales tax holidays.
Is Hawaii a member of the SST (Streamlined Sales Tax)?
Currently, Hawaii is not a full or associate member of the Streamlined Sales Tax Governing Board (SSTGB).
How to get a sales tax permit / links to register in this state?
You can register online at: Hawaii Tax Online - Department of Taxation
For more information on Hawaii rates, see: Hawaii County Surcharge Table - Excise and Use Tax