Hawaii Business Taxes: Complete Overview for Small Business Owners

Running a business in Hawaii means navigating a tax landscape that looks very different from the mainland. Between the General Excise Tax, 12-bracket state income tax, employer-only unemployment insurance, mandatory withholding, and Hawaii-specific taxes like the Transient Accommodations Tax, the list of obligations can feel overwhelming, especially for new business owners. This guide covers every tax a Hawaii business might owe, with the actual rates, forms, and deadlines you need to stay compliant in 2026.

1. All Hawaii Business Taxes at a Glance

Before diving into the details, here’s a master reference table showing every tax a Hawaii business might encounter. Not every business owes all of these. It depends on your business type, whether you have employees, and what kind of income you earn.

2. General Excise Tax (GET)

The General Excise Tax is the single most important tax for most Hawaii businesses. It’s also the one most commonly misunderstood, because it is not a sales tax.

What Makes GET Different

GET is a gross receipts tax levied on the privilege of doing business in Hawaii. Unlike a mainland sales tax that’s added at the register and paid by the consumer, GET is the business’s tax. It applies to your total gross income (every dollar that comes in), regardless of your expenses, profit, or whether you collect it from customers.

• Base rate: 4% on most business activities (retail, services, contracting)
• County surcharge: All four Hawaii counties (Honolulu, Maui, Hawaii, Kauai) currently impose an additional 0.5% surcharge, bringing the effective rate to 4.5% for most businesses
• Wholesale rate: 0.5% on wholesale transactions
• Insurance commissions: 0.15%

Passing GET to Customers

Hawaii law allows businesses to visibly pass on the GET to customers as a separate line item. Most businesses do this. However, the amount you pass on is also subject to GET (the “tax on the tax”), which is why the common pass-on rate is 4.712% rather than a flat 4.5%. The 4.712% pass-on rate ensures you collect enough to cover the GET on both the original sale and the surcharge amount itself.

GET Filing: Forms G-45 and G-49

• Form G-45: Periodic GET return, filed monthly, quarterly, or semi-annually depending on your tax liability
• Form G-49: Annual return and reconciliation, due on the 20th day of the fourth month after your tax year ends (April 20 for calendar-year filers)
• Filing thresholds: Annual GET over $4,000 = monthly; $4,000 or less = quarterly allowed; $2,000 or less = semiannually allowed
• File online: Through Hawaii Tax Online (hitax.hawaii.gov)

Every business operating in Hawaii must register for GET by filing Form BB-1 with the Department of Taxation. This gives you your GET license, which must be displayed at your place of business.

For more on GET, including pass-on calculations, county surcharge details, and common filing mistakes, see our complete GET guide.

3. Hawaii State Income Tax

In addition to GET (which taxes gross receipts), Hawaii imposes an income tax on net income: your revenue minus allowable deductions and expenses. The form you file and the rates that apply depend on your business entity type.

Individual Income Tax (Sole Proprietors, Single-Member LLCs)

If you operate as a sole proprietor or single-member LLC, your business income flows through to your personal return. Hawaii has 12 income tax brackets (the most of any state), with rates ranging from 1.4% to 11%.

Forms by Entity Type

• Form N-11: Hawaii resident individual income tax return, used by sole proprietors and single-member LLC owners who are Hawaii residents
• Form N-15: Nonresident or part-year resident income tax return, for business owners who live outside Hawaii but earn income here
• Form N-20: Partnership return, filed by partnerships and multi-member LLCs (informational return; income passes through to partners)
• Form N-35: S-Corporation return, filed by S-Corps (informational return; income passes through to shareholders)
• Form N-30: C-Corporation income tax return. C-Corps pay tax at the entity level, with rates from 4.4% to 6.4% on net income

Estimated Tax Payments

If you expect to owe at least $500 in Hawaii income tax after withholding and credits, you’re required to make quarterly estimated tax payments using payment voucher Form N-200V (individuals) or Form N-201V (corporations and other entities). Estimated payments are due:

• April 20 (Q1)
• June 20 (Q2)
• September 20 (Q3)
• January 20 of the following year (Q4)

4. Withholding Tax (Employer Obligation)

If you have employees working in Hawaii, you must withhold Hawaii state income tax from their wages and remit it to the Department of Taxation. This is separate from federal income tax withholding. Hawaii has its own system with its own forms.

How It Works

• Form HW-4: Every employee completes a Hawaii Employee’s Withholding Allowance and Status Certificate (HW-4). Unlike the federal W-4, the HW-4 still uses the traditional allowance system. Each allowance reduces the amount of state tax withheld.
• Withholding tables: You use the Hawaii withholding tax tables published by the Department of Taxation to determine how much to withhold from each paycheck based on the employee’s HW-4 information, pay frequency, and wage amount.
• No HW-4 on file? You must withhold at the highest rate (single with zero allowances) until the employee submits a completed HW-4.

Depositing Withheld Taxes

• Deposits (Form VP-1): Quarterly if your annual Hawaii withholding is $5,000 or less; monthly, by the 15th of the following month, if it is over $5,000 up to $40,000; semiweekly by EFT if it exceeds $40,000 (similar to the federal schedule).
• Form HW-14: The (Quarterly) Withholding Tax Return, due by the 15th day of the month after each quarter (April 15, July 15, October 15, January 15).
• File and pay online: Through Hawaii Tax Online.

Annual Reconciliation

• W-2 / HW-2: Give employees their Form HW-2 or W-2 and file the state copies with the Department of Taxation by January 31 (paper filers use transmittal Form HW-30; employers filing 10 or more must e-file starting in 2026).
• Form HW-3: The former annual reconciliation return has not been required since tax year 2020.

5. Unemployment Insurance (UI) Tax

Hawaii’s unemployment insurance program is administered by the Department of Labor and Industrial Relations (DLIR). Unlike federal unemployment tax, Hawaii UI tax is paid entirely by the employer. No deductions from employee wages are permitted.

UI Tax Rates

• New employer rate: 2.40% for 2026. This is the standard rate assigned to new businesses until they establish an experience record (typically after your first full year of covered employment)
• Experience-rated range: 0% to 5.6% for 2026 (Schedule C), based on your claims history, plus a 0.01% Employment and Training assessment when your rate is above zero. Fewer former employees filing successful unemployment claims means a lower rate.
• Taxable wage base: $64,500 per employee for 2026 (Hawaii adjusts this annually based on statewide average wages)

Filing Requirements

• Form UC-B6: Quarterly Wage and Contribution Report. Filed with the DLIR every quarter.
• Due dates: April 30, July 31, October 31, and January 31 for Q1 through Q4, respectively.
• Registration: Any employer with one or more employees must register with the DLIR (there is no minimum payroll), and the status report is due within 20 days of hiring. Register online at uiclaims.hawaii.gov.

6. Transient Accommodations Tax (TAT)

The Transient Accommodations Tax applies to the furnishing of transient accommodations: hotel rooms, vacation rentals, bed-and-breakfasts, and other short-term lodging where the stay is less than 180 consecutive days.

TAT Rate and Application

• Current TAT rate: 11% of the gross rental proceeds (raised from 10.25% on January 1, 2026 by Act 96, SLH 2025)
• Applies to: Hotels, motels, condominiums, timeshares, Airbnb/VRBO listings, bed-and-breakfasts, and any other accommodation rented for less than 180 consecutive days
• In addition to GET: TAT is assessed on top of GET. A short-term rental operator owes both 11% TAT and 4.5% GET on gross rental income, for a combined state tax burden of about 15.5% before the 3% county TAT

TAT Filing

• Form TA-1: Periodic TAT return, filed monthly, quarterly, or semi-annually based on your TAT liability
• Form TA-2: Annual return and reconciliation
• Registration: Transient accommodation operators must register with the Department of Taxation using Form BB-1
• Online platform operators: Platforms like Airbnb may collect and remit TAT on behalf of hosts in some jurisdictions. Verify whether your platform handles this or if you need to file yourself.

7. Use Tax

Hawaii’s use tax is one of the most commonly overlooked business obligations. It applies when you purchase goods from out-of-state vendors and bring them into Hawaii for use in your business, and the seller did not collect Hawaii GET on the transaction.

How Use Tax Works

• Rate: The same as GET: 4% plus the 0.5% county surcharge (4.5% total) on goods you use in your business; 0.5% on goods imported for resale at retail
• When it applies: Whenever you buy tangible personal property from an out-of-state seller who doesn’t charge Hawaii tax, and you use, consume, or store the goods in Hawaii
• Common examples: Equipment purchased online from mainland vendors, office supplies ordered from out-of-state companies, machinery imported for use in your Hawaii business
• Reporting: Use tax is reported on the same Form G-45 (periodic) and Form G-49 (annual) that you use for GET. There’s a specific section for use tax

8. Federal Tax Obligations

In addition to all the Hawaii-specific taxes above, your business is subject to the same federal taxes as businesses in every other state. Here’s a concise overview of the key federal obligations.

FICA: Social Security and Medicare

The Federal Insurance Contributions Act (FICA) is typically the largest payroll tax for employers. It’s split equally between employer and employee.

• Social Security: 6.2% on wages up to $184,500 (2026 wage base). Employer matches the employee’s 6.2%, for a combined 12.4%.
• Medicare: 1.45% on all wages, no cap. Employer matches the employee’s 1.45%, for a combined 2.9%.
• Additional Medicare: An extra 0.9% applies to employee wages over $200,000 per year. This is employee-only, with no employer match.
• Total employer FICA cost: 7.65% on employee wages (up to the Social Security wage base)

FUTA: Federal Unemployment Tax

The Federal Unemployment Tax Act (FUTA) funds the federal portion of the unemployment system. It’s paid exclusively by the employer.

• Gross rate: 6.0% on the first $7,000 of each employee’s wages per year
• State credit: Employers who pay state UI tax on time receive a credit of up to 5.4%
• Effective rate: 0.6% (after the 5.4% credit) on the first $7,000 per employee
• Maximum per employee: $42/year ($7,000 × 0.6%)
• Filing: Form 940 (annual). Deposit quarterly if liability exceeds $500.

Federal Income Tax Withholding

You must withhold federal income tax from employee wages based on the information they provide on Form W-4. You deposit withheld taxes (along with FICA) to the IRS on either a monthly or semi-weekly schedule, depending on your total tax liability during the lookback period.

• Monthly depositors: Tax liability of $50,000 or less in the lookback period. Deposit by the 15th of the following month
• Semi-weekly depositors: Tax liability exceeding $50,000. Deposit within 3 business days of payday
• Quarterly reporting: File Form 941 each quarter to report wages and taxes withheld
• Year-end: Issue W-2s to employees by January 31; file W-2s and W-3 with the SSA by January 31

Federal Income Tax on Business Profits

Your business also owes federal income tax on its profits. The structure depends on your entity type:

• Sole proprietors / single-member LLCs: Report business income on Schedule C of Form 1040. Taxed at individual rates (10%–37%).
• Partnerships / multi-member LLCs: File Form 1065 (informational). Income passes through to partners, who report on their individual returns.
• S-Corporations: File Form 1120-S (informational). Income passes through to shareholders.
• C-Corporations: File Form 1120. Taxed at the flat 21% corporate rate.
• Self-employment tax: Sole proprietors and partners also owe self-employment tax (15.3% on net self-employment income, the employer and employee share of FICA combined) on top of regular income tax.

9. Key Deadlines Overview

Keeping track of every tax deadline is one of the hardest parts of running a Hawaii business. Here are the major filing and payment dates you need to know.

For a month-by-month breakdown of every Hawaii business tax deadline in 2026, see our Hawaii Business Tax Calendar 2026.

10. How PDS Can Help

Pacific Data Services has been helping Hawaii businesses manage their tax and payroll obligations since 1969. If the list of taxes, forms, and deadlines in this guide feels overwhelming, you’re not alone. And you don’t have to handle it all yourself.

What PDS Handles

• GET filing: PDS prepares and files your G-45 periodic returns and G-49 annual reconciliation as part of our bookkeeping service. We calculate your GET liability, ensure the correct county surcharges are applied, and file on time every period.
• Payroll processing: Gross-to-net payroll calculation for every employee, every pay period, including all federal and Hawaii deductions.
• Federal tax deposits: FICA and federal income tax withholding deposited to the IRS on schedule.
• Hawaii withholding: Withholding deposits (Form VP-1) and quarterly HW-14 returns filed with the Department of Taxation.
• UI reporting: UC-B6 quarterly wage and contribution reports filed with the DLIR.
• Year-end filings: W-2s, W-3s, Hawaii W-2/HW-2 filing, Form 940, and ACA 1095-C reporting (for applicable large employers).
• Direct deposit: Employee paychecks deposited directly to their bank accounts.