Hawaii’s General Excise Tax, known as GET, is a privilege tax the state charges businesses on virtually all gross income earned from commercial activity in the islands. The base state rate is 4%, and because every county has added a 0.5% surcharge, the effective rate on most transactions is 4.5%.1Department of Taxation. General Excise Tax (GET) Information The tax is owed by the business, not the customer, though businesses are allowed to pass the cost along.
Why GET Is Not a Sales Tax
If you have moved to Hawaii from the mainland or are starting to sell into the state, the first thing to understand is that GET is structured differently from a sales tax. A sales tax is a tax on the buyer, collected at the register and forwarded by the seller. GET is a tax on the business for the privilege of doing business in Hawaii, and the legal obligation to pay sits entirely with the business even when the cost is built into the price.2State of Hawaii Department of Taxation. An Introduction to the General Excise Tax
The scope is also much broader. Where a typical sales tax hits retail purchases of tangible goods, GET reaches retail sales, wholesale transactions, services, rental income, construction contracts, business interest income, royalties, and commissions.1Department of Taxation. General Excise Tax (GET) Information Doctors, lawyers, consultants, and accountants owe GET on their gross receipts, just like a surf shop or a restaurant does.
Current GET Rates
The rate depends on what kind of activity generates the income:
- 4.0% for retail sales of goods and services, construction contracting, real property rentals, business interest income, and most other activities.1Department of Taxation. General Excise Tax (GET) Information
- 0.5% for wholesaling, manufacturing, producing, and wholesale services sold to another business for resale.2State of Hawaii Department of Taxation. An Introduction to the General Excise Tax
- 0.15% for insurance commissions.3State of Hawaii, Department of Taxation. Tax Facts 37-1 General Excise Tax (GET)
All four counties have adopted a 0.5% surcharge on activities taxed at the 4% rate, which brings the combined rate to 4.5% for retail-level transactions statewide. The surcharge funds local transportation projects and is currently authorized through December 31, 2030. It does not apply to the 0.5% or 0.15% activities.1Department of Taxation. General Excise Tax (GET) Information
Who Has to Pay
If you earn income from any business activity performed in Hawaii, you almost certainly owe GET on it. Freelancers and independent contractors are treated as business entities even when they operate as sole proprietors, and the tax is calculated on gross income, not net profit. You cannot deduct your business expenses before calculating what you owe.4Hawaii Revised Statutes. Hawaii Code 237 – Imposition of Tax A freelance graphic designer who bills $80,000 and has $30,000 in expenses still owes GET on the full $80,000.
You also do not need a physical office or storefront in Hawaii to owe the tax. Any out-of-state business that earns $100,000 or more in gross income from Hawaii sources, or completes 200 or more transactions with Hawaii customers during the current or preceding calendar year, is deemed to be doing business in the state and must register.5Hawaii.gov. Tax Information Release No. 2019-03 – Marketplace Facilitators
If you sell through a marketplace like Amazon or Etsy, Hawaii law treats the platform as the retail seller for those transactions, so the platform collects and remits GET at the 4% retail rate on your behalf.6Justia. Hawaii Code 237 – Marketplace Facilitators You remain responsible for GET on any direct sales you make outside the platform.
Passing GET On to Customers
Businesses may pass the GET cost on to customers, either by building it into prices or listing it as a separate line item on receipts.2State of Hawaii Department of Taxation. An Introduction to the General Excise Tax Most show it separately so the total matches customer expectations.
Here is where the math gets slightly odd. When you pass the tax on, that extra charge becomes part of your gross receipts, which are themselves subject to GET. To account for the tax-on-tax, Hawaii allows a maximum visible pass-on rate that is a little higher than the headline rate. With all counties at 4.5%, the maximum pass-on rate is 4.712%.1Department of Taxation. General Excise Tax (GET) Information On a $100 purchase, up to $4.71 can be added as a GET line item, bringing the total to $104.71.
Main Exemptions
GET reaches almost everything, but a few categories of income are exempt.
Medicare, Medicaid, and TRICARE Payments
Starting January 1, 2026, amounts healthcare providers receive for goods and services covered under Medicare, Medicaid, or TRICARE are exempt from GET. The exemption covers direct program payments as well as patient copayments, deductibles, and coinsurance tied to those covered services.7Hawaii.gov – Department of Taxation. General Excise Tax Exemption for Amounts Received for Healthcare-Related Goods and Services Purchased Under Medicare, Medicaid, or TRICARE Before that date, medical practices owed GET on all patient revenue regardless of payer.
Nonprofit Organizations
IRS tax-exempt status does not automatically exempt a nonprofit from GET. Organizations must separately apply by filing Form G-6 with the Hawaii Department of Taxation and paying a one-time $20 fee. If approved, the exemption covers dues, donations, gifts, and incidental interest income from checking and savings accounts. Gross receipts from fundraising activities like fairs, bazaars, and charity sales remain subject to GET, because the primary purpose of those activities is generating income rather than carrying out the exempt mission.8Department of the Attorney General. Tax Issues for Hawaii Nonprofit Organizations
Getting a GET License
Before you can legally conduct business in Hawaii, you need a GET license. You apply using Form BB-1, the State of Hawaii Basic Business Application, which asks for your Federal Employer Identification Number (or Social Security Number for sole proprietors), business start date, and accounting period. The one-time registration fee is $20.1Department of Taxation. General Excise Tax (GET) Information
You can file the application and pay the fee through Hawaii Tax Online, the state’s electronic portal for tax registration, filing, and payments.9Hawaii.gov. Tax Services Once approved, you receive a state tax identification number and can begin filing returns. The license does not expire. If you close your business, notify the Department of Taxation so it stops expecting returns.
Filing Returns
GET filing involves two kinds of returns: periodic returns during the year and an annual reconciliation after the year ends.
Periodic Returns on Form G-45
Form G-45 reports gross income, claims exemptions, and pays the tax throughout the year. It is due on or before the 20th day of the month following the end of the filing period.10State of Hawaii Department of Taxation. General Instructions for Filing the General Excise/Use Tax Returns How often you file depends on your annual GET liability:
- Monthly is the default for all taxpayers, with returns due by the 20th of the following month.
- Quarterly filing is available if your total GET liability for the year will not exceed $4,000.
- Semiannual filing is available if your total GET liability for the year will not exceed $2,000.
- If your annual GET liability is $100 or less, you may be excused from periodic returns entirely, though you still must file the annual return.11Justia. Hawaii Code 237 – Monthly, Quarterly, or Semiannual Return, Computation of Tax, Payment
If your actual liability outgrows the threshold for your filing frequency, the Department of Taxation can revoke the less-frequent filing permit and require monthly returns.11Justia. Hawaii Code 237 – Monthly, Quarterly, or Semiannual Return, Computation of Tax, Payment
Annual Return on Form G-49
Every GET-registered business must file Form G-49, the Annual Return and Reconciliation, regardless of filing frequency. It summarizes all business income for the tax year and reconciles what you reported on your periodic returns. For calendar-year filers, Form G-49 is due by April 20 of the following year.12State of Hawaii Department of Taxation. Calendar Year 2025 Important Hawaii Tax Deadlines Small businesses sometimes assume their periodic filings are enough and skip the annual return. They are not, and it is not.
Penalties for Missing Deadlines
Hawaii’s GET penalties stack quickly, so the consequences depend on exactly what went wrong:
- Failure to file a return: 5% of the tax due for each month or fraction of a month the return is late, up to a maximum of 25%.
- Late payment after a timely filing: if you file on time but do not pay the full amount within 60 days, the Department of Taxation can add up to 20% of the unpaid balance.
- Underpayment due to negligence: up to 25% of the underpayment.
- Underpayment due to fraud: up to 50% of the underpayment.13Justia. Hawaii Code 231 – Additions to Taxes for Noncompliance or Evasion; Interest on Underpayments and Overpayments
Interest also accrues at two-thirds of one percent per month on any unpaid balance, starting the first day after the payment deadline.13Justia. Hawaii Code 231 – Additions to Taxes for Noncompliance or Evasion; Interest on Underpayments and Overpayments That is 8% per year, which adds up fast on an overdue balance. The failure-to-file penalty alone can reach 25% within five months, so filing on time even if you cannot pay the full amount is always the better move.