Hawaii State Taxes: A Simple Guide

🌺Hawaii state income tax

Hawaii taxes personal income with its own rules and brackets. In general:

• •Residents above certain income thresholds must file a Hawaii individual income tax return.
• •Nonresidents may need to file if they earn Hawaii-source income.
• •Hawaii's definitions of taxable income, credits, and deductions differ from federal rules.

A typical resident files a federal Form 1040 and a Hawaii return if they meet filing requirements.

🏝️General Excise Tax (GET)

Hawaii does not have a traditional sales tax. Instead, it charges a General Excise Tax (GET) on businesses for nearly all business activity, including wholesale, retail, services, and rental income.

While GET is imposed on businesses, it is often passed on to consumers as an extra percentage on receipts, similar to a sales tax.

• •Rates vary depending on business activity.
• •Many residents experience GET added at checkout just like a sales tax.

Businesses operating in Hawaii must register, collect, and remit GET where applicable.

🏡Property taxes

Hawaii's property taxes are administered at the county level, not the state level. They are based on assessed value and classification (e.g., residential, commercial).

• •Homeowners receive bills from their county.
• •Hawaii property tax rates are relatively low compared to many mainland states.
• •Counties offer homeowner exemptions and other tax relief programs.

🔗Putting Hawaii taxes together

A typical Hawaii resident may face these taxes each year:

• •Federal income tax (Form 1040)
• •Hawaii state income tax
• •General Excise Tax (passed on through purchases)
• •County-level property taxes (if they own a home)

Understanding fundamentals like how to file taxes makes it easier to see where Hawaii's rules fit into your overall tax picture.