Kintsugi AI

Discover Hawaii's unique sales tax system, the General Excise Tax (GET)! From county surcharges to new digital goods taxes, this guide simplifies tax planning in Hawaii for businesses and residents. Stay informed and compliant with Hawaii’s latest 2024 updates.

Transcript

1. Understanding Understanding Hawaii’s Sales Tax Hawaii’s Sales Tax System System A Comprehensive Overview A Comprehensive Overview Visit Our Website trykintsugi.com
2. Hawaii’s General Excise Tax (GET) In Hawaii, the General Excise Tax (GET) is the primary form of sales tax, applied to nearly all business activities, including retail sales, services, and even interest income. Base State Rate: 4% for most transactions. Local Impact: Certain counties, such as Honolulu, impose additional surcharges that increase the effective tax rate.
3. County-Specific Sales Tax Rates Honolulu (Oahu): In 2024, the surcharge in Honolulu increases from 0.5% to 0.75%, resulting in an effective GET of 4.75%. Maui: Maui introduced a 0.5% surcharge in 2024, bringing the GET rate to 4.5%. Hawaii (Big Island): The surcharge remains 0.25%, keeping the total rate at 4.25%. Kauai: Kauai maintains its 4.5% rate with a 0.5% surcharge.
4. What Is the General Excise Tax? General Excise Tax (GET) The General Excise Tax (GET) is often mistakenly called a sales tax but is more comprehensive. It applies to businesses for the privilege of operating in Hawaii, covering retail, services, and even some income. Key Point: Businesses need to account for the GET in their pricing and comply with state tax regulations.
5. 2024 Updates: What’s Changed? The GET saw a modest increase in 2024: Oahu: 0.75% county surcharge (total 4.75%). Maui: New 0.5% surcharge (total 4.5%). Kauai & Hawaii: No significant changes. New Tax on Digital Goods & Services: Streaming and online courses are now taxed at 4.5%.
6. How to Calculate Hawaii Sales Tax Step 1: Determine if the Sale is Taxable: Most tangible goods and services are subject to GET. Some items may be exempt. Step 2: Identify the Applicable Rate: Use the base GET rate (4.0%) plus any applicable county surcharge. Step 3: Calculate Tax: Physical Goods: Sale price × GET rate + County surcharge. E-commerce Sales: Apply GET to all online sales from Hawaii-based businesses. Software & Services: Taxable under GET, with applicable county surcharge.
7. E-Commerce & SaaS Taxation Businesses selling online must pay GET on e- commerce transactions at the origin rate (4%). Remote sellers from out-of-state are also required to collect GET if they meet the economic nexus threshold of $100,000 in sales or 200 transactions annually in Hawaii. Software as a Service (SaaS): Taxable under GET at 4% + county surcharge.
8. Understanding Use Tax The Use Tax ensures that items purchased out of state are taxed similarly to those bought in Hawaii. If Hawaii’s GET wasn’t charged on out-of- state purchases, businesses and individuals must pay the use tax, which mirrors the GET rate. The use tax rate is 4%, with additional county surcharges in areas like Oahu (total 4.5%).
9. Key Compliance Tips Businesses must list GET separately on receipts and regularly file returns (monthly, quarterly, or annually). Use tax must also be reported and remitted for out-of-state purchases. Stay Informed: Keep up-to-date with county surcharges and tax changes to ensure compliance.
10. Recent Changes and Their Impact In 2024, Hawaii increased the Transient Accommodations Tax (TAT) from 10.25% to 11%. Other surcharges include an additional 0.25% in Maui and changes to digital goods taxes. The goal of these increases is to fund infrastructure and public works projects.
11. Conclusion: Tax Planning in Hawaii Hawaii’s tax system is unique and requires businesses and residents to stay informed of the various rates, surcharges, and changes that may impact financial planning. Key Takeaways: Base GET rate: 4%. County surcharges can increase the tax rate. Use tax applies to out-of-state purchases. 2024 brings minor increases in GET and digital goods taxation.
12. Thank Thank You! You! FOR YOUR ATTENTION FOR YOUR ATTENTION Visit Our Website trykintsugi.com