hi-sales-tax

Section 1 -- Quick reference

Quick reference

Field	Value
Jurisdiction	Hawaii
Tax type	General Excise Tax (GET) -- NOT a traditional sales tax; tax on SELLER's gross income
Retail GET rate	4.00% (4.50% on Oahu with county surcharge)
Wholesale rate	0.50%
Services rate	4.00% (4.50% Oahu)
Insurance commissions	0.15%
Effective rate when passed to buyer	~4.166% (to cover GET on the pass-through)
Tax base	Virtually ALL business activity including services, rentals, commissions
Sourcing	Destination-based
Economic nexus	$100,000 in gross proceeds or gross income
Tax authority	Hawaii Department of Taxation (DoTax)
Portal	https://tax.hawaii.gov
SST member	No
Skill version	2.0

• GET imposed on seller, applies broadly, and pyramids — CRITICAL: GET is imposed on the SELLER, not the buyer. GET applies to virtually ALL transactions including services. GET pyramids (cascades) at every supply chain level.

Section 3 -- Transaction pattern library

Transaction pattern library

Pattern	Taxable?	Notes
General TPP	TAXABLE 4% (4.5% Oahu)	Retail rate
Clothing	TAXABLE	No exemption
Grocery food	TAXABLE	No food exemption -- GET applies to all
Prepared food	TAXABLE
ALL services (including professional)	TAXABLE	Hawaii taxes virtually ALL services
SaaS	TAXABLE
Digital goods	TAXABLE
Wholesale sales	TAXABLE at 0.50%	Lower wholesale rate
Prescription drugs	EXEMPT
Manufacturing equipment	No specific exemption	GET applies broadly
Resale	0.50% wholesale rate	Not fully exempt; taxed at wholesale rate

Section 5 -- Classification rules

GET pyramiding

• GET pyramiding across supply chain — GET cascades at every level. Manufacturer pays 0.5% on wholesale sales. Wholesaler pays 0.5%. Retailer pays 4%. If passed to buyer, the pass-through amount is additional gross income subject to GET again.

Tax on virtually everything

• Broad tax base including professional services — Hawaii has one of the broadest tax bases in the US. Legal, accounting, medical, consulting -- all subject to GET at 4%.

Section 10 -- Prohibitions

• Prohibition 1 — NEVER call Hawaii's tax a "sales tax" -- it is a General Excise Tax on the seller's gross income.
• Prohibition 2 — NEVER assume food is exempt -- Hawaii taxes grocery food under GET.
• Prohibition 3 — NEVER assume services are exempt -- Hawaii taxes virtually ALL services.
• Prohibition 4 — NEVER forget the pyramiding effect -- GET cascades through the supply chain.
• Prohibition 5 — NEVER forget the Oahu county surcharge (0.50% additional).
• Never compute numbers — NEVER compute any number.

Disclaimer

Informational only. Review by qualified professional required before filing.

Disclaimer

This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.

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