Creating an LLC in Hawaii
Creating an LLC in Hawaii takes 3-5 business days. The Hawaii Department of Commerce and Consumer Affairs (DCCA) processes LLC filings. The DCCA offers 1-day turnaround for $25 more.
Hawaii doesn’t require a general business license. Some permits may be needed, like from the Department of Health.
Taxation of LLCs in Hawaii
How are LLCs taxed in Hawaii?
All Hawaii LLCs must report a 4% General Excise Tax on all sales. An LLC regarded as a corporation is subject to a 4.40 to 6.40% Hawaii corporate income tax rate. LLCs with a revenue threshold of over $100,000 must pay 6.4% income tax.
By default, a Hawaii LLC is taxed by the Internal Revenue Service (IRS) based on the number of Members the LLC has. An LLC with 1 owner (Single-Member LLC) is taxed like a Sole Proprietorship. An LLC with 2 or more owners (Multi-Member LLC) is taxed like a Partnership.
State Tax Comparison and Foreign LLC Registration
How Do State Taxes In Hawaii Fare Compared To Other States: To recap, Hawaii currently has a 4% state tax rate. Hawaii’s tax system ranks 41st, compared to all other states.
To do business in Hawaii, all LLCs organized outside the state must register with the Hawaii Department of Commerce and Consumer Affairs Business Registration Division. Foreign LLCs must appoint a registered agent physically located in Hawaii.
Names may be checked for availability by searching the Business Registration Division business name database. You may reserve a name by filing an Application for Reservation of Name with the Business Registration Division. You can file online or by postal mail. The reservation fee is $10.
Additional Information
All LLC members taking profits out pay 15.3% self-employment tax.
Hawaii’s 4% tax rate ranks 41st among states.
Hawaii LLCs are considered pass-through entities, meaning all taxable profits are passed on to members, who claim them on their personal tax returns. Apart from GET taxes that must be collected and remitted to the state, Hawaii does not collect additional state taxes on LLC profits.
It will cost you $50 to register your LLC in Hawaii with the Hawaii Department of Commerce and Consumer Affairs Business Registration Division, plus an additional $1 State Archives fee.