Hawaii: Sales Tax Handbook
Hawaii Sales Tax Rate
|State Sales Tax||Local Sales Tax Range||Average Local Tax||Average Combined Tax||Max Combined Tax|
|4%||0% - 0.5%||0.431%||4.431%||4.5%|
2023 Hawaii Sales Tax Handbook
Hawaii Table of Contents
- List of Local Sales Tax Rates
- Sales Tax Calculator
- Sales Tax Exemption Certificates
- Sales Tax Info For Businessowners
- Taxable vs. Non-Taxable Purchases
- Sales Tax on Cars & Vehicles
- More Information
Hawaii's Excise Tax By The Numbers:
Hawaii has a lower-than-average sales tax, including when local sales taxes from Hawaii's 4 local tax jurisdictions are taken into account.
Rankings by Average State + Local Sales Tax:
Ranked 44th highest by combined state + local sales tax
Ranked 2nd highest by per capita revenue from state + local sales taxes ($2,088 per capita)
Rankings by State Sales Tax Only:
Ranked 20th highest by state sales tax rate
Ranked 1st highest by per capita revenue from the statewide sales tax ($2,108 per capita)
Printable PDF Hawaii Sales Tax Datasheet
Hawaii has a statewide excise tax rate of 4%, which has been in place since 1935.
Municipal governments in Hawaii are also allowed to collect a local-option sales tax that ranges from 0% to 0.5% across the state, with an average local tax of 0.431% (for a total of 4.431% when combined with the state sales tax). The maximum local tax rate allowed by Hawaii law is 0.5%. You can lookup Hawaii city and county sales tax rates here.
This page provides an overview of the sales tax rates and laws in Hawaii. If you are a business owner and need to learn more about things like getting a sales tax permit, filing a sales tax return, or making tax-exempt purchases for resale see the Hawaii Sales Tax Handbook's Table of Contents above.
What is exempt from sales taxes in Hawaii?
Many states have special sales tax rates that apply to the purchase of certain types of goods, or fully exempt them from the sales tax altogether. Here's how Hawaii taxes five types of commonly-exempted goods:
For more details on what types of goods are specifically exempt from the Hawaii sales tax see Hawaii sales tax exemptions. To learn more about what types of transactions are subject to the sales tax to begin with, see what purchases are taxable in Hawaii? Taxation of vehicle purchases in particular are discussed in the page about Hawaii's sales tax on cars.
Are services subject to sales tax in Hawaii?
"Goods" refers to the sale of tangible personal property, which are generally taxable. "Services" refers to the sale of labor or a non-tangible benefit. In Hawaii, services are taxable unless specifically exempted.
About the Hawaii Sales Tax
While the state of Hawaii has no official sales tax,the state employs the Gross Receipts Tax and a Use Tax, which is imposed on the business rather than the buyer. These taxes are imposed on nearly all transactions, including services. Because the state allows businesses to pass this tax on to the buyer (which most do), it can be considered a "de facto" sales tax.
It is worth noting that Hawaii, unlike any other state, applies the excise tax to rent, perishable foods, and medical services. In addition, businesses are not required to state the tax separately on the receipt. Hawaii also allows a "tax on tax" to be charged, meaning that the tax percentage can be quite high on certain transactions.
Is the Hawaii Sales Tax Destination-Based or Origin-Based?
Hawaii is a destination-based sales tax state, which means that sales tax rates are determined by the location of the buyer when the transaction is completed. This means that, for orders placed via the internet/mail by a customer within Hawaii from a Hawaii vendor, the vendor must collect a sales tax rate applicable at the buyer's address (including any applicable local sales taxes). This can significantly increase the complication of filing your sales tax return, because different sales tax rates must be charged to different buyers based on their location.
Is Hawaii a Streamlined Sales Tax State?
Hawaii is not a member of the Streamlined Sales and Use Tax Agreement. The SSUTA is an agreement adopted by about half of states that ensures that their sales tax laws are simplified to lower the costs associated with compliance.
Contact the Hawaii Department of Taxation
The Hawaii Excise Tax is administered by the Hawaii Department of Taxation. You can learn more by visiting the sales tax information website at tax.hawaii.gov.
Phone numbers for the Excise Tax division of the Department of Taxation are as follows:
- Local Phone: (808) 587-4242
- Toll-Free Phone: (800) 222-3229
Learn More: Our Book Recommendations
If you would like to learn more about how to manage your Hawaii sales taxes, we recommend the following books:
Small Business Taxes For Dummies
This introductury book assists both current and aspiring small business owners with important tax planning issues, and covers a wide variety of small business tax topics.Buy on Amazon
A Guide to Sales and Use Tax
This book provides information and insights on how to comply with a multitude of sales and use tax laws and regulations. This is our recommendation if you need an in-depth look into sales taxes.Buy on Amazon
Simplify Hawaii sales tax compliance! We provide sales tax rate databases for businesses who manage their own sales taxes, and can also connect you with firms that can completely automate the sales tax calculation and filing process. Click here to get more information.
Hawaii Sales Tax Rates by Zip Code:
Need an updated list of Hawaii sales tax rates for your business? Download our Hawaii sales tax database!