In Hawaii, where lush landscapes and the spirit of aloha shape daily life, even the tax system operates uniquely. What many refer to as Hawaii Sales Tax is actually the
General Excise Tax (GET)—a business privilege tax rather than a traditional sales tax.
Unlike sales tax, which is collected from consumers at checkout, GET is imposed directly on businesses for the right to conduct business in the state. Ecommerce businesses in Hawaii including those selling online or out-of-state businesses selling to Hawaii customers must comply with Hawaii’s GE Tax.
This guide covers everything ecommerce businesses need to know about Hawaii sales tax, officially known as GE Tax. From tax rates and exemptions to permit registration and filing requirements, we’ll break down the essentials so you can navigate compliance with confidence.
Sales Tax Nexus in Hawaii
When a business creates either a physical or economic nexus, it is required to collect sales tax in Hawaii.
Physical Nexus
A physical nexus means having a significant physical presence or engaging in enough activities within a state to require the collection and payment of sales tax. The factors that determine a physical nexus in Hawaii include:
- Physical Location: This includes having an office, a place for distribution, sales, or showcasing products, a warehouse or storage facility, or any other place where you conduct business.
- Inventory in the State: This covers situations where you store your products within the state, even if it’s done through a third-party fulfillment center or 3PL (like Amazon FBA) or an online marketplace.
- Employees, independent contractors, agents, or other representatives operating on your behalf.
- Affiliate Nexus or Click-through Nexus: An out-of-state seller without a physical presence in Hawaii may still have a nexus in Hawaii if it has an affiliate in the state. This applies when the affiliate has a physical presence in Hawaii and acts on behalf of the seller, such as through shared merchandise exchanges or loyalty programs.
- Presence at Trade Shows: Exhibiting at Hawaii trade shows and taking orders creates nexus if the product is accepted in Hawaii. Attending as a consumer or exhibiting without making sales does not create nexus.
- Phone Number in Hawaii: A Hawaii phone number is considered part of seller activity in the state and is a factor in establishing nexus within the state.
To stay informed about the current criteria for establishing a physical sales tax nexus in Hawaii, take a look at the official regulations available right
here!
Economic Nexus
States have established regulations to collect sales tax from out-of-state sellers who meet certain revenue and/or transaction thresholds. This rule is known as economic nexus.
Beginning July 1, 2018, the threshold for economic nexus in Hawaii is $100,000 in gross revenue
or 200 transactions in the previous or current calendar year’s sales.
While the nexus criteria mentioned above generally apply to most businesses, additional methods exist for establishing economic sales tax nexus. To access a comprehensive list of these rules, please refer to the
governing laws for economic sales tax nexus requirements in Hawaii.
Hawaii Sales Tax on Goods and Services
One of the first things you need to know is whether the goods you’re selling or services you’re offering are taxable in Hawaii.
Tangible Products
Almost all goods are taxable in Hawaii, including:
The goods that are exempt from sales tax are:
- Feminine Hygiene Products – Beginning July 1, 2025, feminine hygiene products, including sanitary napkins, tampons, panty liners, douches, menstrual cups, and hygiene-related creams and sprays, will be exempt from sales tax.
- Diapers
- Prescription Medications
- Textbooks
- Medical Devices – This exemption does not apply to durable medical equipment that has a 4-year lasting period.
- Energy-efficient Appliances – Hawaii provides tax exemptions for products that promote energy efficiency.
Services
In Hawaii, the majority of service-based transactions, such as information services and employment services, are subject to sales tax.
However, there are specific situations where certain services are tax-exempt. For instance, tax-exempt services are:
- Call center services
- Foster care
- Ship building and repair
- Nonprofit hospital services
Software as a Service (SaaS)/Digital Products
SaaS is taxable in the state of Hawaii.
Digital products (i.e., ebooks, downloadable video content, mobile apps) are also taxable.
Shipping/Handling
Shipping and handling charges in the state of Hawaii are
taxable. Charges for items shipped outside the state are excluded.
GET Licenses in Hawaii
Now that you’ve got a handle on when sales tax nexus applies and which products are taxable in Hawaii, the next important step is getting your license. Hawaii requires businesses to obtain a GET license.
Seller’s Permit
You can register for a Hawaii sales tax permit online at the
Hawaii Tax Online or follow our detailed
step-by-step guide for assistance.
Ensure you have specific information on hand when registering for a seller’s permit, including, but not limited to:
- Business Identification Information (name, address, phone number, email address)
- Business Entity Structure (sole proprietorship, partnership, corporation, LLC, etc.)
- Federal Employer Identification Number (EIN or FEIN)
- Owner/Partner/Officer Information
- Business Activity Details (description of products or services sold, sales volume, date of the first sale or the expected date to start dates)
- NAICS code
Registration fee
There is a
$20 fee to register for a sales tax permit.
Renewal
In Hawaii, you don’t have to renew your sales tax permit.
Resale Certificate
A resale certificate also known as a Resale Certificate for Goods is a document that allows businesses to buy products without paying sales tax on them, as long as they plan to resell those items to customers, who will then pay the tax. As a seller, you can also accept Resale Certificate for Goods from others looking to buy for resale.
Hawaii uses resale certificates (Forms G-17, G-18, or G-19) to document tax-free sales for resale purposes.
You can fill out the Resale Certificate for Goods provided by Hawaii after you receive your GE Tax License. If you don’t want the hassle of registering, sign up for our all-inclusive service that includes sales tax registration.
Streamlined Sales Tax (SST)
The Streamlined Sales Tax (SST) is an initiative to simplify and standardize sales tax regulations across multiple states. However, Hawaii is not a party to this program, meaning it does not follow the uniform rules and definitions established by SST but has its own sales tax regulations.
Check with the Hawaii Revenue Services for the most current information on Hawaii’s participation in the Streamlined Sales Tax initiative.
Calculating and Collecting Sales Tax in Hawaii
Sales Tax Computation
In Hawaii, there is no traditional sales tax. Instead, businesses pay a GE Tax on their gross income. While businesses may pass this tax on to customers, it is still considered a tax on the business rather than a direct sales tax on consumers. The GET rate varies based on the location and type of transaction. The standard state GET rate is 4.00%, but some counties impose an additional surcharge, making the total rate 4.50% in certain areas.
Here’s an example: Suppose an out-of-state seller meets Hawaii’s economic nexus threshold and sells to a customer in Honolulu, HI with a ZIP code of 96813). The seller would need to apply the applicable GET rate as follows:
 |
SALES TAX FORMULA |
RATE |
| State: |
Hawaii |
4.00% |
| County: |
Honolulu |
0.50% |
| District: |
First District |
0.21% |
| City: |
Honolulu |
0.00% |
| Combined Sales Tax Rate = |
4.71% |
|
To make life easier, consider using sales tax software or consulting a tax professional, like TaxHero, to ensure accurate tax calculations and collections. Understanding these tax rules helps you stay compliant, whether you’re in-state or out-of-state.
Filing and Remitting Sales Tax Returns in Hawaii
The next step after collection is filing and remitting your Hawaii sales tax returns. Filing and remittance can vary in frequency, typically monthly, quarterly, or semi-annually.
- If your total Hawaii GE Tax payments exceed $4,000 in a year, you must file monthly.
- If your total GE Tax payments are $4,000 or less, you can file quarterly.
- If your total GE Tax payments are $2,000 or less, you can file semi-annually.
It’s crucial to keep accurate records of your sales and tax collections and adhere to the filing schedule set by the state to remain compliant with Hawaii’s sales tax regulations.
Due Dates
In Hawaii, the due date falls on the
20th day of the following month. For instance, sales tax collected in January is due by February 20th for monthly filers.
However, if this day is a holiday, weekend, or in the rare occurrence of a natural disaster, the deadline is typically extended to the next business day. For instance, if you’re a monthly filer and filing sales tax for the month of April, and the May 20th deadline falls on a holiday or weekend, you’ll have until May 21st, the following business day, to submit.
Filing Sales Tax Returns
To file your sales tax return for Hawaii, a few options are available:
- File online through the Hawaii Tax Online.
- File by mail – You can file and pay using g-45 form by mail.
- File with TaxHero – Let TaxHero take care of it so you don’t have to worry about missing a payment or return.
Timely Filing Discount
Some states offer a discount to businesses for collecting, filing, and remitting sales tax on time as an incentive to process sales taxes promptly. However, Hawaii does not offer a discount.
Sales Tax Holiday
Hawaii does not offer sales tax holidays because the state imposes a General Excise Tax (GET) instead of a traditional sales tax. Since GET is a tax on businesses rather than consumers, there are no designated periods when it is waived.
Hawaii Sales Tax Penalties
Like in most states, sales tax is a big part of how Hawaii generates revenue. Thus, maintaining compliance with sales tax regulations is of utmost importance. Failure to do so can lead to consequences and sales tax penalties. Therefore, it is crucial always to ensure you are up-to-date in filing, collecting, and remitting sales tax to the state.
Here are the specific penalties for non-compliance with sales tax regulations in Hawaii:
- The penalty for not filing a return on time is 5% of the unpaid tax per month (or part of a month), up to a maximum of 25% of the total unpaid tax.
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