The History of Hawaii General Excise Tax

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When did Hawaii general excise tax start?
In 1932, neither Hawaii precedents nor mainland practice would have suggested a general tax aimed at consumption. The sweep of retail sales taxes across the nation did not begin until the following year. The business excise remained in force only until January I, 1936.
Read more on lrb.hawaii.gov

A tax on commercial activity, the Hawaii General Excise Tax (GET), is levied on practically all business dealings in Hawaii. The Territorial Legislature initially imposed the tax in 1935. Since that time, it has developed into a significant source of income for the state of Hawaii.

The GET is levied against the gross revenue that companies bring in as a tax on the privilege of conducting business in Hawaii. The GET is now charged at 4%, however certain counties have added an extra cost for some purchases.

Businesses in Hawaii must register with the Hawaii Department of Taxation in order to submit a G45 tax form. The GET is reported and paid using the G45 form on a monthly, quarterly, or annual basis. Sales, rentals, and services income are all required to be reported by businesses during the reporting period. Penalties or interest costs may apply for failure to submit or pay the GET.

Visitors visiting Hawaii are furthermore subject to a lodging tax. The current Kauai hotel tax rate is 10.25%. The cost of the hotel room and any other taxable services rendered by the hotel, such as room service or laundry services, are subject to this tax. Revenue from the hotel tax supports Hawaii’s tourism industry as well as other government initiatives.

There are two different taxes that enterprises in Hawaii may be required to pay: Ta 1 and Ta 2. The General Excise Tax, or Ta 1, is levied on nearly all commercial activity in Hawaii. A tax known as Ta 2—the transient accommodations tax—is levied on anyone who rent out temporary residences including hotel rooms, holiday homes, and bed & breakfasts.

In conclusion, the Hawaii General Excise Tax, which has been in place since 1935, generates a sizable amount of money for the state. Using the G45 tax form, businesses are expected to regularly file and pay the GET. A hotel tax is imposed on visitors to Hawaii as well, which helps fund government initiatives and the tourism industry. Finally, depending on their commercial activity, enterprises in Hawaii may be subject to both Ta 1 and Ta 2 taxes.

FAQ
How much is the Hawaii timeshare occupancy tax?

The amount of the Hawaii timeshare occupancy tax is not mentioned in the article “The History of Hawaii General Excise Tax” specifically. It is important to keep in mind that the general excise tax and the temporary accommodations tax, both of which are covered in the article, apply to timeshare owners in Hawaii.

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