Hawaii: Sales Tax Handbook
What purchases are taxable in Hawaii?
The taxability of various transactions (like services and shipping) can vary from state to state, as do policies on subjects such as whether excise taxes or installation fees included in the purchase price are also subject sales tax. This reference is here to help answer your questions about what is and is not subject to the Hawaii sales tax.
Contents1.) Taxability of Goods and Services
- General Hawaii taxability guidelines
- Are services subject to sales tax?
- Is shipping & handling subject to sales tax?
- Are drop shipped items taxable?
Section 1: Taxability of Goods and Services
What transactions are generally subject to sales tax in Hawaii?
In the state of Hawaii, general excise tax is legally required to be collected from most tangible, physical products being sold to a consumer. Several examples of exceptions to this tax are liquor, and some things specifically intended for resale.
This means that someone in the state of Hawaii who sells school supplies would most likely be required to general excise tax, but an individual who sells liquor products might not be required to charge sales tax.
Are services subject to sales tax in Hawaii?
The state of Hawaii does collect their general excise tax when it comes to certain services.
You can find a table describing the taxability of common types of services later on this page.Top
Are shipping & handling subject to sales tax in Hawaii?
The state of Hawaii has very simple rules when it comes to taxes on shipping. They charge a general excise tax on the shipping charges, excluding those being shipped out of the state.Top
Are drop shipments subject to sales tax in Hawaii?
"Drop shipping" refers to the common business practice in which a vendor, often in a different state, makes a sale of a product which is shipped to the end-user by a third party supplier hired by the initial vendor. In Hawaii, drop shipments are generally exempt from sales taxes. If the either the reseller or the purchaser has tax nexus in Hawaii, the drop shipper is indeed considered to be subject to tax at a wholesale rate. If neither the purchaser or the reseller has tax nexus in the state, the drop shipper is legally subject to tax at the retail rate
Section 2: Taxability of Various Items in Hawaii
This table shows the taxability of various goods and services in Hawaii. If you are interested in the sales tax on vehicle sales, see the car sales tax page instead. Scroll to view the full table, and click any category for more details.
|Products on Amazon.com||EXEMPT|
|Food and Meals|
|Leases and Rentals|
|Motor Vehicles||TAXABLE *|
|Tangible Media Property||TAXABLE|
|Manufacturing and Machinery|
|Raw Materials||TAXABLE *|
|Utilities & Fuel||TAXABLE|
|Medical Goods and Services|
|Medical Devices||EXEMPT *|
|Newspapers and Magazines|
|General Occasional Sales||EXEMPT *|
|Optional Maintenance Contracts|
|General Optional Maintenance Contracts||TAXABLE *|
|Parts Purchased for Use in Performing Service Under Optional Maintenance Contracts||TAXABLE|
|Pollution Control Equipment|
|General Pollution Control Equipment||TAXABLE *|
|Transportation Services||TAXABLE *|
|Software and Digital Products|
|Canned Software - Delivered on Tangible Media||TAXABLE|
|Canned Software - Downloaded||TAXABLE|
|Custom Software - Delivered on Tangible Media||TAXABLE|
|Custom Software - Downloaded||TAXABLE|
|Customization of Canned Software||TAXABLE|
|Vending Machine Sales|
* See notes in category taxability page for details
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