General excise tax (GET) on invoices in Hawaii

Hawaii's general excise tax for contractors: a tax on your business, an optional itemized pass-on capped at 4.712%, and the county surcharge.

General excise tax (GET)

4%

Cities and counties may add their own.

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Hawaii has no sales tax. Its general excise tax (GET) is a tax on your business’s gross income, and you may pass it on to your customer as an itemized amount, but you don’t have to.

GET is a tax on your business, not your customer

The GET is a privilege tax on doing business in Hawaii, charged on the gross income your business receives. To get a GET license, file Form BB-1, State of Hawaii Basic Business Application, and select “General Excise/Use Tax”. Registration costs $20.

Contracting and services: taxed on gross income

GET applies to income from almost all business activities, including services and construction contracting. A contracting business pays it at the state rate on this page, on its gross income.

If you pay a subcontractor for contracting work, as defined in HRS §237-6, you may deduct those payments from your gross income, as long as the subcontractor pays GET on them. Your return must then show the subcontractor’s name and general excise number.

Passing GET on: optional, agreed and itemized

You may add GET to your customer’s bill, but you don’t have to. If you do:

  • Tell your customer the exact dollar amount or percentage ahead of time, and get their agreement to pay it.
  • On your bill, list it as an additional itemized amount.
  • Never pass on more than the GET actually due on the sale.
  • Count what you pass on as gross income, because it’s taxed too.

If you don’t pass GET on, you can’t say there’s “no tax”. Saying so can bring a fine of up to $1,000 for each violation (HRS §237-49).

Tax Facts 37-1 shows three ways to quote an item that sells for $104.71:

  • Price plus the GET rate: $100 plus 4.712% GET.
  • Price plus the GET amount: $100 plus $4.71 GET.
  • Total price including GET: $104.71.

County surcharge and the 4.712% maximum

The City and County of Honolulu and the counties of Kauai, Hawaii and Maui each add a 0.5% surcharge through December 31, 2030. It applies to activities taxed at the rate on this page, such as contracting, and not to the lower rates for activities like wholesaling. Surcharge included, the most you may visibly pass on is 4.712% in each of these counties. You must allocate your gross income to the designated taxation districts under sections 18-237-8.6-01 to 18-237-8.6-10 of the Hawaii Administrative Rules.

Overcharging and tax-exempt customers

  • Charging more GET than you owe. Consumer protection laws forbid it, and the Office of Consumer Protection takes immediate action against businesses that charge more tax than is due.
  • Tax-exempt customers. Sales to tax-exempt customers such as nonprofits, to federal, state and county agencies (including the military) and to credit unions are generally subject to GET. There’s no GET exemption based on a customer’s tax-exempt status. One exception: a sale of goods directly to the federal government or a credit union is exempt, and you may claim a deduction for it. Ask the Department of Taxation if you’re unsure whether a sale qualifies.
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