You might be asking whether you require a business license to conduct business if you are an independent contractor in Hawaii. The location and kind of employment you conduct will determine the answer, according to the question. In general, you must get a General Excise Tax (GET) license from the state Department of Taxation if you are offering services or selling items in Hawaii. Regardless of whether you are an LLC member or a solo proprietor, this rule applies to you.
With the GET license, you may effectively collect and remit sales taxes on the goods and services you offer. The type of products or services and the place of the transaction affect the tax rate. After receiving your GET license, you must file regular tax returns and settle any outstanding debts.
Depending on the nature of your business, you might also need to apply for additional licenses or permissions if you’re operating as an LLC. For instance, the state may require you to obtain a professional license if you are offering professional services like accountancy or legal counsel. A food service permit from the Department of Health may be required if you run a food truck or catering business.
You have two options for paying oneself as an LLC owner: either as an employee or as a member. You must set up payroll and deduct taxes from your paycheck if you decide to pay yourself as an employee. If you wish to receive a regular paycheck and benefit from some employee benefits, this can be a nice choice for you.
As an alternative, you can pay yourself as an LLC member. This implies that you will get a payout from the LLC’s earnings each year. If you want greater flexibility in how you receive your income and want to avoid the administrative bother of setting up payroll, this can be a smart alternative.
The manner they are taxed is the primary distinction between an LLC and an INC. An LLC is a pass-through entity, which means that the owners are taxed on their individual income tax returns for both corporate profits and losses. The owners of an INC, on the other hand, are taxed on any dividends they get because the INC is a separate legal entity and must pay taxes on its income.
The organizational structure of the businesses is another distinction. In comparison to INCs, which have a more fixed corporate structure with shareholders, directors, and officers, LLCs are more adaptable in terms of ownership and management structure.
The answer is yes; such an LLC is referred to as a single-member LLC. For small business owners who desire the liability protection of an LLC but don’t want the administrative hassle of running a larger company, this is a common alternative.
Yes, Hawaii levies a $15 annual LLC tax. Every year on the anniversary of the day your LLC was formed, this tax is required. If the tax is not paid, penalties may apply and your LLC may ultimately be dissolved.
In Hawaii, regardless of whether they are an individual contractor or a business corporation, everyone who conducts business within the state is required to obtain a Hawaii tax ID number. Included in this are people who work as independent contractors and get paid for their efforts.