Hawaii is a lovely destination to travel to because of its magnificent beaches, rich vegetation, and distinctive culture. But it’s crucial to be aware of the state’s sales tax if you intend to shop while you’re there. The general excise tax (GET), sometimes known as the sales tax in Hawaii, might be a little perplexing to both locals and visitors. What you should know about Hawaii’s sales tax in 2021 is provided below.
Businesses in Hawaii that sell products or services are subject to the general excise tax. This implies that you must collect and pay the GET to the state if you own a business in Hawaii. The tax does not only apply to enterprises, though. Even if a person is not operating a formal business in Hawaii, they are nonetheless liable to the GET if they sell products or services there.
Depending on how much tax they owe, Hawaii businesses must file and pay their GET returns either monthly or quarterly. A business may file yearly if its GET debt for the reporting period is less than $20. Due to fines and interest costs, it’s critical to maintain track of your tax responsibilities and file your taxes on time.
In Hawaii, the general excise tax rate varies according to the county where the transaction occurs. Currently, the rate is 4% in the other counties and 4.5% in Honolulu County. It’s crucial to understand that the GET is different from a sales tax. The GET is imposed on every transaction in the supply chain of a firm, including sales between enterprises, in contrast to a sales tax, which is only paid to the ultimate sale price of a product. The tax burden for enterprises in Hawaii may increase as a result.
Businesses that are current on their tax obligations are given a Hawaii Certificate of Compliance by the state’s Department of Taxation. For some commercial operations, such as submitting bids for government contracts or renewing professional licenses, this certificate is necessary. A business must have submitted all required tax forms and paid all due taxes, including any penalties and interest, in order to receive a certificate of compliance.
In conclusion, the general excise tax (GET), which is levied against companies and individuals involved in the sale of products or services in the state, will serve as Hawaii’s sales tax in 2021. The county-specific tax rate varies, with Honolulu County having a rate of 4.5%. Businesses must submit and pay their GET returns on a monthly or quarterly basis, and maintaining compliance with all tax requirements is necessary to receive a Hawaii Certificate of Compliance. To prevent fines and interest charges, it’s critical for both enterprises and individuals to understand their tax responsibilities in Hawaii.