Understanding the General Excise Tax (GET)
Because the general excise tax is imposed on you (the business), it is an ordinary and necessary cost of doing business that can be claimed as a business expense deduction on your income tax return. The GET is a privilege tax imposed on business activity in the State of Hawaii. The tax is imposed on the gross income received by the person engaging in the business activity.
Hawaii has a General Excise Tax (or GET), which is applied to gross income from all business activity within the state. You must obtain a Hawaii GET License if you wish to do business within the state of Hawaii, regardless of your business type.
Excise Taxes and Deductions
An excise or excise tax (sometimes called an excise duty) is a type of tax charged on goods produced within the country. This tax is now known as the Central Value Added Tax (CENVAT). Excise taxes can be ad valorem (paid by percentage) or specific (cost charged by unit).
An excise tax isn’t deductible if it’s for a personal expense. You can deduct as a business expense excise taxes that are ordinary and necessary expenses of carrying on your trade or business.
Tax Deductible Business Expenses
Self-employed people cannot generally write groceries off their taxes. However, if you’re self-employed and you use your cellphone for business, you can claim the business use of your phone as a tax deduction.
PAYING AND DEDUCTING GET IN HAWAII
Who is required to pay general excise tax in Hawaii?
The General Excise Tax (GET) is imposed on gross income received by Hawaii businesses.
To start a Hawaii business, complete the Form BB-1 application and pay a $20 registration fee to obtain required tax licenses.
The GET rate is 4% on Oahu, Kauai, and the Big Island.
Businesses can deduct GET expenses on federal income tax returns.
The GET differs from a sales tax levied directly on consumers.
Cancellation and Verification of a GET License
How do I cancel my Hawaii general excise tax license?
To cancel a GET license submit form GEW-TA-RV-1, available online.
You can verify a Hawaii business license by calling the verification line.
Businesses can scan QR codes on licenses to validate authenticity.
Monthly filing is required if paying over $4,000 in GET annually. Apply for extensions using Form G-39.