Hawaii General Excise Tax and Invoicing Rules for 2026

TL;DR: Hawaii imposes a general excise tax (GET) of 4% on most transactions (4.5% in Honolulu) instead of a traditional sales tax. The GET applies to nearly all goods and services with very few exemptions. Remote sellers exceeding $100,000 in sales or 200 transactions must collect. GET is imposed on the seller but routinely passed to buyers.

Hawaii's general excise tax is fundamentally different from a traditional sales tax. It is imposed on the seller's gross income rather than on the buyer, applies to nearly all transactions including services, and features a unique "tax on tax" pyramiding effect. This guide covers Hawaii's GET rates, nexus rules, invoice practices, exemptions, filing deadlines, and penalties for 2026.

State general excise tax rate

Hawaii does not have a traditional sales tax. Instead, it levies a general excise tax (GET) on the gross income of businesses. The base rate is 4% for retail transactions and 0.5% for wholesaling and certain other activities. Honolulu County imposes an additional 0.5% surcharge, bringing the effective retail rate to 4.5% in Honolulu.

Because GET is imposed on the seller and the passed-through amount is itself subject to GET, many businesses charge an effective 4.712% in Honolulu (or 4.166% outside Honolulu) to fully recover the tax -- a practice the state expressly permits. This "tax on tax" effect is unique to Hawaii's system.

Nexus rules

Physical nexus exists if you have a business location, employees, agents, or property in Hawaii.

Economic nexus applies to remote sellers exceeding $100,000 in gross revenue or 200 or more transactions from sales into Hawaii during the current or previous calendar year. Either threshold triggers the obligation. Marketplace facilitators must register and collect GET on behalf of their third-party sellers. Hawaii's GET applies to marketplace facilitators at the retail 4% rate on gross proceeds from marketplace sales.

What must appear on invoices

Because GET is technically a tax on the seller's gross income rather than a sales tax on the buyer, Hawaii does not legally require sellers to separately state the tax on invoices. However, sellers are permitted to visibly pass GET on to buyers, and most businesses do. Invoices should include:

• Seller's name, address, and Hawaii GET license number
• Buyer's name and address
• Date of transaction
• Description of goods or services
• Sale price of each item or service
• GET amount if passed through (clearly labeled as "general excise tax" or "GET")
• Applicable rate (4% or 4.5%, or the effective pass-through rate of 4.166% or 4.712%)
• Total amount due
• Exemption details if applicable

The visible GET rate on invoices may appear as 4.166% or 4.712% to account for the pyramiding effect. This is standard business practice in Hawaii and customers are accustomed to seeing these rates.

Exemptions and special cases

Hawaii's GET has very few exemptions, making it one of the broadest consumption taxes in the US:

• Prescription drugs and prosthetic devices are exempt
• Sales to the federal government are exempt
• Insurance proceeds and certain real property rentals have specific provisions
• Amounts received by qualifying nonprofits may be exempt with a valid exemption certificate
• Exported goods shipped out of Hawaii are exempt
• Certain agricultural cooperative payments may qualify for exemption

Notably, groceries are fully taxable, clothing is fully taxable, and nearly all services are taxable under GET. This includes professional services, medical services (though not prescription drugs), consulting, repair, and personal care services. There is no general exemption for manufacturing equipment or agricultural inputs. SaaS and digital products are taxable. Hawaii's GET base is among the broadest of any state in the nation.

Filing frequency and deadlines

All filers must also submit an annual reconciliation return by April 20 of the following year, regardless of filing frequency. Hawaii requires electronic filing through the Hawaii Tax Online portal. There is no vendor discount for timely filing.

Penalties for non-compliance

A penalty of 5% per month of unpaid tax applies for late filing, up to a maximum of 25%. Interest accrues at approximately 0.667% per month (8% per annum). Operating without a GET license carries penalties of up to $1,000. Failure to file the annual reconciliation return incurs a separate penalty. The Department of Taxation may also assess estimated taxes based on industry averages when returns are not filed, which typically results in higher assessments than actual liability.

Frequently asked questions

What is the difference between GET and sales tax? Hawaii's GET is imposed on the seller's gross income from all business activities, not just retail sales. It applies to wholesaling (0.5%), services, commissions, rental income, and retail sales (4%). Because it is on the seller, the passed-through amount is itself taxable, creating a "pyramiding" effect that makes the effective rate slightly higher than the stated rate. A traditional sales tax is imposed on the buyer and collected by the seller.

Are services taxable in Hawaii? Yes. Virtually all services are subject to GET, including professional services, consulting, healthcare services, repair, construction, personal care, and transportation. Hawaii has one of the broadest service tax bases in the nation, with very few service categories excluded from GET.

Why do some businesses charge 4.712% instead of 4.5%? The extra fraction accounts for the "tax on tax" effect. Since GET is on the seller's gross income and the passed-through tax becomes part of that income, businesses in Honolulu County charge 4.712% (and businesses elsewhere charge 4.166%) to fully recover the GET without absorbing any of the tax cost themselves. This practice is sanctioned by the Hawaii Department of Taxation.

Do I need to file an annual GET return even if I file monthly? Yes. All GET filers must submit an annual reconciliation return (Form G-49) by April 20 of the following year, regardless of whether they file monthly, quarterly, or semi-annually during the year. The annual return reconciles all periodic payments made throughout the year.