2025 Hawaii Sales Tax Guide

Hawaii’s sales tax isn’t a sales tax. Instead, the state has a general excise tax (GET), which applies to all gross income on goods and services.

Retail and services have a higher GET rate than things like wholesale and manufacturing, and some business activity is exempt entirely. Additionally, out-of-state companies that meet nexus thresholds in Hawaii are required to pay GET. This makes it challenging to know what GET rates and requirements apply to your business. In this article, we’ll cover how GET works, its different tax rates, and what businesses with customers in Hawaii should be aware of.

Understanding Hawaii General Excise Tax

General excise tax is a broad tax on all the proceeds you get from doing business in Hawaii, not just profit. GET applies to sales, services, royalties, rentals, and more. It even applies to the GET tax itself if you break it out and have customers pay it (we’ll “get” into that later).

The state of Hawaii charges a 4% GET on retail and services, which account for a big chunk of the state’s business activity. Other industries have GET rates that range from 0.15% (insurance commissions) to 0.5% (wholesaling, manufacturing, importing for resale).

Retail/service businesses are also subject to county surcharges of 0.5%, bringing the effective GET to 4.5%. (The GET surcharge had previously been lower in some counties but stands at 0.5% today.) 

Absorbed vs. Pass-Through GET

Hawaii allows retail/service businesses to either absorb the GET or pass it through to the consumer as a separate line item. As a result, the maximum pass-through rate is 4.71%, not 4.5%. If you simply add 4.5% to a customer’s bill, you’d end up with a shortfall, because Hawaii wants to collect tax on any value you receive from the customer, including a broken-out tax item.

How Hawaii GET Tax Works

Entities with business activity in Hawaii must pay GET on all gross income they receive from customers. This includes sales of goods, services, contracting, rentals, events, exhibitions, and other related activities. GET also applies to any costs you incur as reimbursement and that are marked up or spent on your business (such as a wedding photographer charging $100 to travel to a location when the actual transportation cost was $50).

Any entity with physical nexus or economic nexus in Hawaii must pay GET. So, you could be required to pay GET if your company is based out of state but meets certain criteria.

Do I Have to Collect Hawaii GET from Customers?

You must pay GET to Hawaii, but you have the choice to break it out as a line item for customers or not. Having GET listed could potentially harm your customers’ experience in specific industries, so it’s essential to consider this. 

Here are examples of when businesses may or may not want to break out GET:

To be clear, these businesses must pay GET to the state and county. The question is whether the customer sees it as a separate item or not.

What Creates Sales Tax Nexus in Hawaii?

There are two ways to establish the obligation to pay GET in Hawaii: physical nexus and economic nexus.

• Physical nexus: Having a location in Hawaii (like an office, store, warehouse), employees (including remote workers), inventory, trade show activity, and contracting in the state establishes physical nexus.
• Economic nexus: Crossing thresholds of $100,000 in gross sales or 200 separate transactions into Hawaii over the current or preceding calendar year establishes economic nexus.

How to Collect Hawaii GET

Hawaii is destination-based for purposes of GET and county surcharge. This means that the customer's location determines the surcharge. This also applies to business activities (like contracting) and services that happen in other places. 

When shipping items to Hawaii from outside the United States, you must use the rate of the county where the item is delivered or where the service is performed.

Should You Collect GET on Shipping Charges in Hawaii? 

Shipping and handling charges are usually subject to GET when included in the customer’s final price. There are exceptions if the delivery took place at a later date and the charge exactly matched the business’s cost of delivery. But for the most part, if the customer’s receipt shows a shipping charge, Hawaii treats that as gross income to your business.

Hawaii Marketplace Facilitator Requirements

Marketplace facilitators are required to collect and remit GET for transactions on their platform, but the rate can vary. Marketplaces that sell products directly pay the retail rate (4% plus surcharges) while those that sell wholesale or facilitate services used in Hawaii pay the wholesale rate (0.5%). 

Independent sellers may pay the wholesale rate when selling tangible goods through a marketplace facilitator. However, service providers or others selling directly to Hawaii customers may still be subject to the retail GET rate.

Hawaii Tax Collection Best Practices

Here are a few things to keep in mind to stay compliant in Hawaii:

• Maintain accurate records by county of where your goods/services are delivered.
• Separate your taxable vs exempt sales carefully.
• Monitor sales volume and transaction count closely if you're out of state to track when you cross the economic nexus threshold.
• Utilize digital tools or software to automate calculations by county, particularly for shipping or online orders.
• Stay current with Hawaii Department of Taxation (DOTAX) announcements (they sometimes change surcharges or county assignments).

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What Products Are Taxable in Hawaii?

Many physical and digital goods, as well as services, are taxable in Hawaii, whether sold in person or online. Let’s take a look at a few examples.

Are Groceries Taxable in Hawaii? 

Groceries generally are subject to GET. Hawaii does not broadly exempt groceries; however, specific programs or food stamps may influence GET requirements.

Is Clothing Taxable in Hawaii? 

Yes, clothing and footwear are taxed under GET. There is no general clothing exemption. Remember, you have the option to absorb GET in the price of the clothing or separate it on the customer’s receipt.

Are Digital Products Taxable in Hawaii?

Digital goods (ebooks, downloads, software, subscriptions, etc.) are taxable under GET.

Is Software-as-a-Service (SaaS) Taxable in Hawaii?

SaaS businesses that generate gross income in Hawaii are required to pay GET, depending on the nexus thresholds.

Are Services Taxable in Hawaii? 

Most services are taxable under GET. Some services may be exempt under specific circumstances, but the vast majority of services are taxable.

Tax-exempt Items

Hawaii does offer some exemptions to GET. These include:

• Medical services paid by Medicare, Medicaid, and Tricare (effective Jan 1, 2026)
• Business activities of qualified disabled persons
• Goods paid for by food stamps
• Sales to the federal government
• Certain medical items (prescription drugs, prosthetics, durable medical equipment) are exempt or have special treatment
• Some goods or services used or shipped outside Hawaii may have exemptions or reduced obligations
• Non-profit organizations

How to Register for a Hawaii GET License

Registering for a GET license allows you to collect and pay the excise tax in Hawaii. This is important to do as soon as you set up business operations or cross the threshold into economic nexus in the state.  

Registration Process

Here’s how to get a GET license in Hawaii:

1. Apply for a GET license through the Hawaii Department of Taxation (DOTAX) with the Hawaii Tax Online Portal
2. Use the BB-1 form to set up a new license
3. Provide your business name, address, EIN/SSN, owner information, nature of business, and other documentation
4. Pay a $20 registration fee (some license types require different fees)

Special Permit Requirements

While all businesses, except non-profits, use the BB-1 form to register, different GET rates apply to other types of business activities. You’ll file different forms to pay a lower GET if special situations apply. For example, resellers can file a form to purchase goods at the wholesale GET rate instead of the retail rate. Wholesalers also file a certificate to maintain the lower GET rate of 0.5%.

Hawaii GET Filing and Payment Requirements

Hawaii requires businesses to file and pay GET on a monthly, quarterly, or annual basis, and filing due dates always fall on the 20th of the month (or the next business day). All companies also file annual tax returns, whether they file periodic returns or not. Let’s take a closer look below.

Hawaii Filing Frequencies

Periodic GET return (form G-45) frequencies are based on your expected GET liability:

• Monthly: You must file monthly if your annual GET liability is above $4,000.
• Quarterly: This applies if you have less than $4,000 in annual GET liability.
• Semi-annual: DOTAX allows some small businesses to file every six months if their tax liability is less than $2,000.

And no matter how often you file a periodic return, you’ll also file an annual return (form G-49) each year.

Hawaii Tax Due Dates in 2025

The periodic GET returns for monthly filers are due on the 20th day of the month following the close of the taxable period. If your sales tax filing due date falls on a weekend or holiday, it’s due the next business day. 

Hawaii Monthly Filing Due Dates

Hawaii Quarterly Filing Due Dates

Hawaii Annual Sales Tax Filing Due Date

Common Hawaii GET Compliance Challenges

Between figuring out if you owe GET in Hawaii at all to deciding whether you want to pass the charge to customers, understanding GET is complex. A few compliance challenges businesses come across include:

• Not tracking transaction counts or gross revenue properly for economic nexus, especially for online or out-of-state sellers
• Misclassifying exempt products or services (e.g. medical, legal, digital, SaaS)  
• Forgetting to file periodic zero returns when you owe $0 in a period
• Late payments or filings leading to penalties and interest
• Lacking documentation for wholesale and resale exemptions or for out-of-state shipments

Hawaii GET: Conclusion

To sum up, GET applies to gross income, so it includes more than sales tax. The retail and services GET rate is effectively 4.5% if you absorb it in the price or 4.71% if you pass it to the consumer. Collecting and remitting the right amount is important to avoid penalties. If you don’t “get” how GET works in Hawaii, take the time to learn how it applies to your business.

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About the author

Brogan Woodburn

Brogan Woodburn is a writer who turns complex data into clear insights. He’s worked with companies like USA Today, MarketWatch, and Microsoft, and has experience covering tax concepts and compliance. Outside of writing, he’s a professional guitarist, performing jazz and classical music across Central Oregon.