Contractor Licensing in Hawaii
A business in Hawaii needs a license to pay tax. Interstate businesses with a physical presence in Hawaii also pay tax.
Independent Contractor Tax Obligations
An independent contractor is self-employed and pays self-employment taxes.
Hawaii Contractor License Requirements
- Hawaii requires handymen to have licenses for jobs over $1,000 or requiring permits.
- State law demands licensed contractors for construction over $1,000.
- Licensing exams evaluate trade knowledge and business law. Licenses ensure safety.
Obtaining a Contractor License in Hawaii
- Choose to apply as an entity or sole proprietor.
- Meet licensing requirements set by the Department of Commerce and Consumer Affairs.
- Three main license types are general engineering contractor, general building contractor, and specialty contractor.
- Verify a business license by contacting the Business Services Division or visiting their website.
Applying for a Hawaii Contractor License
- Determine the type of contractor license needed.
- Access Hawaii Contractor License Application Forms.
- Fulfill requirements and obtain necessary documents.
- Obtain your contractor license bond.
- Pass the required examination.
- Submit your Hawaii Contractor License Application.
- Get your surety bond.
Becoming a Contractor in Hawaii
To be a contractor in Hawaii, you must have a Hawaii Contractor License. Meet specific requirements, including passing an examination and having supervisory experience.
Independent Contractor vs. Business Ownership
An independent contractor is self-employed and pays self-employment taxes. They receive a 1099 tax form and manage their taxes independently. Some states and cities may require permits for business operations. Health professionals may have additional licensing requirements.
Licensing and Operating as an Independent Contractor
- Being licensed demonstrates legitimacy as a business.
- Apply as a sole proprietor or business entity.
- Licensing ensures fair and ethical business practices.
Tax Obligations for Independent Contractors
Independent contractors are responsible for paying their own taxes. They receive a 1099 tax form instead of a W-2.
Licensing Requirements for Independent Contractors
- Most states do not require a business license for independent contractors.
- Check state and local regulations to ensure compliance.
Tax Considerations for Independent Contractors
Every state where income is earned must be accounted for. Independent contractors must issue 1099 forms for services exceeding $600.