The Hawaii Real Property Tax Act (HARPTA) may be a topic of interest if you’re selling real estate in Hawaii. You may wish to know specifically who is accountable for paying this tax. We’ll give a general explanation of HARPTA and respond to some frequently asked questions regarding it and other relevant taxes in Hawaii in this article. What is HARPTA, exactly? A buyer of a Hawaii property must deduct 7.25% of the sale price and return it to the Hawaii Department of Taxation in accordance with the HARPTA state tax legislation. Non-resident sellers with a capital gain on the sale of Hawaii real estate are subject to this tax. The levy is intended to make sure non-resident sellers of Hawaiian real estate pay their fair share of taxes on those sales. What does Hawaii’s capital gains tax on real estate entail? The profit you get when you sell an item with higher value is subject to capital gains tax. For non-resident sellers in Hawaii, the capital gains tax rate on real estate is 7.25%. There are a few exception to this tax, though. For instance, the seller may be entitled to exclude up to $250,000 of the gain from their taxed income if the property is their primary residence. Additionally, the seller might not be subject to HARPTA if they live in Hawaii. Where should I send my Hawaii G-49? You might have to submit a G-49 form to the Hawaii Department of Taxation if you own a business there. The General Excise Tax (GET) of Hawaii is reported and paid using this form. You must submit a check or money order for the amount of tax you owe together with your G-49 form. The following address is where you should send your G-49 form and payment: Hawaii Department of Taxation can be reached at P.O. Box 1530 in Honolulu, Hawaii, 96806-1530. Are Professional Services Subject to Hawaii’s Sales Tax? In Hawaii, professional services are typically taxable. The majority of businesses in Hawaii are subject to the General Excise Tax (GET), including those that offer expert services like accounting, consulting, or legal advice. There are a few exception to this tax, though. The GET may not apply to certain medical and educational services, for instance.
When did the General Excise Tax in Hawaii begin? In 1935, the Hawaii General Excise Tax (GET) was initially put into effect. Businesses are subject to this tax, which is calculated using gross income rather than net income. The current GET rate is 4% for the majority of enterprises, while some may be subject to a higher rate. The state of Hawaii receives a sizable amount of cash from the GET, which is used to pay for numerous public services and initiatives.
In conclusion, HARPTA is a tax that non-residents who sell real estate in Hawaii and realize a capital gain are subject to. To make sure that non-resident sellers pay their fair share of taxes on the sale of Hawaiian assets, Hawaii levies a 7.25% capital gains tax on real estate for non-resident sellers. You should also be aware of Hawaii’s General Excise Tax (GET), which is based on gross income and is imposed on the majority of enterprises.