Hawaii Tax Overview
The state of Hawaii requires you to pay taxes if you are a resident or nonresident and receive income from a Hawaii source. The state income tax rates range from 1.4% to 11%. Hawaii offers tax deductions and credits to reduce your tax liability, including a deduction for medical and dental expenses, a deduction for home mortgage interest, and a tax credit for child and dependent care costs.
Property Tax in Hawaii
Hawaii has the lowest property tax rate in the nation at 0.28%. However, the median annual tax payment is $1,871 due to Hawaii having the highest median home value in the U.S. at $669,200.
Sales and Other Taxes
Hawaii does not have sales tax. It collects a 4% general excise tax on business activities like retail sales and rental income. Oahu added a 0.5% surcharge, bringing the excise tax rate to 4.5%.
Hawaii Tax Impact
If you earn $60,000 a year in Hawaii, your net income will be $44,980 per year or $3,748 per month. Your tax rate is 25.0% and marginal tax rate is 37.8%.
Additional Information
Property tax breaks for seniors vary by county. Honolulu homeowners 65 or older get a $140,000 home exemption. Hawaii has the highest cost of living and is the most expensive retirement state.
Hawaii fully taxes grocery purchases, unlike most mainland states. With state and county tax burdens combined, Hawaii ranked fifth highest at $7,319 per capita as of 2018.
Considerations
Is Hawaii a tax-friendly state?