Sales Tax Exemption and General Excise Tax
In Hawaii, certain items may be exempt from the sales tax to all consumers, not just tax-exempt purchasers. Examples of exempt items in the state are any liquor, and any items which are specifically intended for resale. The Hawaii sales tax rate is 4% as of 2024, with some cities and counties adding a local sales tax on top of the HI state sales tax.
Hawaii collects sales tax in the form of General Excise Tax (GET). All individuals and entities with over 200 taxable transactions and $100,000 in sales require nexus with the government authorities in Honolulu, Hawaii to collect sales tax from their customers.
All business activities are subject to the general excise tax, and while a business does not have to charge its customers the general excise tax, it must pay the tax regardless.
Property Tax and Income Tax Withholding
Property taxes in Hawaii vary by county. The median is $1,324 per year for a home worth the median value of $517,600. On average, Hawaii counties collect 0.26% of a property’s assessed value as tax each year.
Hawaii exempts veterans’ homes from property tax if the veteran is totally disabled from a service-related injury. If spouses jointly own the home, it is still exempt if either resides there.
To be exempt from Hawaii income tax withholding, employees must have owed no federal income tax last year and expect to owe none this year. Non-residents working 60 days or less don’t get withheld if their employer reasonably expects them to work 60 days or less.