Taxes in Hawaii work differently from most states. There is no sales tax; instead, businesses pay a General Excise Tax that almost always shows up on your receipt. On top of that, residents and workers face a progressive state income tax that tops out at 11%, counties run their own property tax systems, visitors pay a Transient Accommodations Tax on short stays, and the state also collects an estate tax, vehicle weight tax, fuel taxes, and employer unemployment contributions.
General Excise Tax Instead of Sales Tax
The General Excise Tax, or GET, is charged on the gross income of a business rather than on a consumer purchase. Legally it is a tax on the business for the privilege of doing business in Hawaii, but most businesses pass it through to customers as a separate line item, so it looks and feels like sales tax at the register.
The base state rate is 4%. All four counties, Honolulu, Maui, Hawaii, and Kauai, have added a 0.5% surcharge, bringing the combined rate to 4.5%.1Department of Taxation. General Excise Tax Information Wholesaling, manufacturing, and producing are taxed at only 0.5%, and insurance commissions at 0.15%.2Hawaii Department of Taxation. Tax Facts 37-1 – General Excise Tax The surcharge does not apply to those lower-rate activities.
Because the GET is levied on gross income, the amount a business passes on to the customer is itself taxable. The maximum pass-on rate in counties with the surcharge is 4.712%, not a flat 4.5%.1Department of Taxation. General Excise Tax Information The GET also reaches further than a typical sales tax. Services, rent, and contracting income are all subject to it, not just retail goods.
Use Tax on Out-of-State Purchases
If you buy from an out-of-state seller that doesn’t collect Hawaii’s GET, you owe a use tax when the goods arrive. This covers internet orders, mail-order goods, and anything else shipped in from an unlicensed seller. Rates mirror the GET: 4% or 4.5% depending on your county for personal use, and 0.5% for goods brought in for resale at retail.3Hawaii Department of Taxation. Tax Facts 95-1 – Use Tax If you already paid sales tax to another state on the same item, that amount credits against your Hawaii use tax. Payment is due by the 20th of the month after the goods enter Hawaii.
Individual Income Tax
Hawaii’s individual income tax is among the steepest in the country. The structure runs across 12 brackets, from 1.4% on the first $9,600 of taxable income for a single filer up to 11% on taxable income above $325,000.4Department of Taxation. Tax Year Information – 2025 Both residents and nonresidents with Hawaii-source income are subject to the tax. Married couples filing jointly move through wider bracket thresholds at the same rate range.
For the 2025 tax year, the standard deduction is $4,400 for single filers and $8,800 for married couples filing jointly.4Department of Taxation. Tax Year Information – 2025 Recent legislation roughly doubles those amounts for tax year 2026, to $8,000 for single filers and $16,000 for joint filers, and also adjusts the bracket thresholds. Confirm the 2026 rate schedule with the Hawaii Department of Taxation before filing.
Capital gains receive no preferential rate. Hawaii treats them as ordinary income and runs them through the same brackets, so high earners can see capital gains taxed at the full 11%, one of the highest state-level capital gains rates in the country.
Corporate Income Tax
Corporations owe a separate income tax under three brackets:5Hawaii Department of Taxation. Hawaii Revised Statutes Chapter 235 – Income Tax Law 4.4% on taxable income up to $25,000, 5.4% on income from $25,001 to $100,000, and 6.4% on income above $100,000.
A corporation whose only Hawaii activity is sales, and whose annual gross sales in the state do not exceed $100,000, may elect to pay a flat 0.5% on those gross sales instead of filing under the brackets.5Hawaii Department of Taxation. Hawaii Revised Statutes Chapter 235 – Income Tax Law The corporate income tax is separate from the GET; a corporation doing business in Hawaii owes both.
Property Taxes
Property tax in Hawaii is a county matter, not a state one. Honolulu, Maui, Hawaii, and Kauai each set their own rates, assessment rules, classifications, and exemptions. Your bill depends both on the assessed value of the property and on how the county classifies it (residential, commercial, agricultural, or hotel and resort, for example), because rates vary by class within each county.
Owners who occupy their property as a primary residence can claim a home exemption that reduces the taxable assessed value. In Honolulu, the exemption is $120,000 for homeowners under 65 and $160,000 for those 65 and older.6City and County of Honolulu. Understanding the Home Exemption Program The other counties publish their own exemption schedules, with different amounts and age thresholds.
Transient Accommodations Tax
The Transient Accommodations Tax, or TAT, applies to gross rental income from any lodging furnished for fewer than 180 consecutive days, including hotels, timeshares, and short-term vacation rentals.7Hawaii Department of Taxation. Hawaii Revised Statutes Chapter 237D – Transient Accommodations Tax The state TAT rate rose from 10.25% to 11% on January 1, 2026.8Hawaii Department of Taxation. Department of Taxation Announcement No. 2026-01
Counties add their own surcharges on top of the state rate. Kauai, for example, levies a 3% county TAT surcharge.9County of Kauai. Transient Accommodations Tax The other counties have adopted similar surcharges. When the county surcharge stacks on the 11% state rate and the GET also applies to the rental income, the total tax on short-term lodging regularly exceeds 17%.
Estate Tax
Hawaii imposes an estate tax on top of the federal one. The state exemption is $5,490,000; estates below that owe nothing to Hawaii.10State of Hawaii Department of Taxation. Instructions for Form M-6 Hawaii Estate Tax Return For estates above the threshold, rates run from 10% to 20% on the amount above it. The 20% top rate, which applies to estates with more than $10 million in taxable value, is the second-highest state estate tax rate in the country.
Hawaii has no gift tax and no inheritance tax.10State of Hawaii Department of Taxation. Instructions for Form M-6 Hawaii Estate Tax Return But the applicable estate tax exclusion is reduced by any federal adjusted taxable gifts the decedent made during life, so large lifetime gifts still shrink the exemption available at death.
Vehicle, Fuel, and Employer Taxes
Vehicle Weight Tax
Hawaii charges an annual state vehicle weight tax tiered by net weight: 1.75 cents per pound up to 4,000 pounds, 2.00 cents per pound from 4,001 to 7,000 pounds, 2.25 cents per pound from 7,001 to 10,000 pounds, and a flat $300 for anything over 10,000 pounds.11Hawaii Department of Taxation. Hawaii Revised Statutes Chapter 249 – County Vehicular Taxes County registration fees are added on top.
Fuel Taxes
Fuel distributors pay state taxes of 32.5 to 40 cents per gallon on liquid fuels such as gasoline. Diesel used for highway driving carries an additional 31.5 to 39 cents per gallon on top of the base levy.12Hawaii Department of Taxation. Outline of the Hawaii Tax System as of July 1, 2025 Add the federal fuel tax and the GET on fuel sales, and Hawaii consistently sits near the top of the country for per-gallon prices at the pump.
Employer Unemployment Insurance
Hawaii employers pay unemployment insurance on the first $64,500 of each employee’s wages, a taxable wage base well above many other states. For 2026, the state is on Contribution Rate Schedule C. New employers pay an initial rate of 2.4% plus a 0.1% employment and training assessment.13Hawaii Department of Labor and Industrial Relations. Contribution Rates Explained – Unemployment Insurance Established employers receive experience-rated assessments that can run higher or lower depending on their history of former employees filing claims.