How Much Does Hawaii Take Out for Taxes?

Hawaii’s tax structure provides insight into financial considerations for residents and businesses. Unlike some other jurisdictions, Hawaii employs a diverse set of taxes that fund its public services, extending beyond just income and property taxes. Navigating these various levies helps individuals and entities accurately plan their financial obligations in the islands.

Hawaii Individual Income Tax

Hawaii operates a progressive individual income tax system, meaning higher income levels are subject to higher tax rates. For the 2024 tax year, these rates range from 1.4% to 11% across twelve income brackets. The specific tax rate applied depends on an individual’s taxable income and their filing status, such as single, married filing jointly, or head of household. This state income tax is distinct from federal income tax, requiring a separate filing with the Hawaii Department of Taxation.

Taxable income is determined after accounting for applicable deductions and exemptions. For 2024, the standard deduction amounts are $4,400 for single filers or those married filing separately, $8,800 for married couples filing jointly or qualifying widow(er)s, and $6,424 for heads of household.

In addition to the standard deduction, taxpayers may claim personal exemptions. Each personal exemption is valued at $1,144. An additional exemption is available for individuals aged 65 or older, and a higher $7,000 exemption can be claimed by those who are blind, deaf, or totally disabled.

Various tax credits are also available to reduce an individual’s overall tax liability, with some credits being refundable, meaning they can result in a refund even if no tax is owed. A notable credit is the Refundable Food/Excise Tax Credit, designed to offset the impact of the General Excise Tax on lower-income households. Eligibility for this credit depends on federal Adjusted Gross Income (AGI) and physical presence in Hawaii for over nine months during the tax year. The amount of this credit varies based on AGI and the number of qualified exemptions.

Other credits include a credit for childcare expenses, a credit for low-income household renters, and a credit equal to 40% of the federal Earned Income Tax Credit.

Hawaii General Excise Tax

Hawaii does not impose a traditional sales tax; instead, it levies a General Excise Tax (GET) on the gross receipts of most business activities. This tax applies to a broad range of transactions, including the sale of goods, services, rentals, and professional activities. While the GET is technically imposed on businesses, it is common practice for businesses to pass this cost on to consumers by adding it to the price of goods or services.

The statewide base GET rate is 4% for most activities. However, a lower rate of 0.5% applies to certain wholesale and manufacturing activities. In addition to the state rate, counties have the authority to impose a surcharge on the GET, which can add up to an extra 0.5%. This means the combined GET rate can reach up to 4.5% depending on the county.

The GET differs from a typical sales tax in several ways. Unlike sales taxes, which are usually collected only at the final point of sale to the consumer, the GET can apply at multiple stages of production and distribution. This means the tax may be applied each time a product or service changes hands within the supply chain. Businesses must register for a GET license and file returns monthly, quarterly, or semi-annually, depending on their tax liability.

Hawaii Property Tax

Property taxes in Hawaii are administered and collected at the county level. This means that property tax rates, assessment methods, and collection procedures vary significantly across Hawaii’s four counties: Hawaii County, Honolulu County, Kauai County, and Maui County.

County assessors are responsible for valuing properties, which then forms the basis for calculating the tax. The property tax bill is determined by multiplying the assessed value of a property by the county’s established tax rate. Property owners may be eligible for various exemptions that can reduce their taxable property value, thereby lowering their overall tax bill.

A common exemption is the homeowner’s exemption, which can reduce the assessed value of a primary residence for tax purposes. Eligibility for such exemptions requires the property to be the owner’s principal place of residence. Despite variations by county, Hawaii has one of the lowest effective property tax rates in the United States, which can be an advantage for homeowners compared to other states.

Other Notable Hawaii Taxes

Hawaii levies several other taxes for residents and visitors. One such tax is the Transient Accommodations Tax (TAT), which is imposed on gross rental proceeds from lodging accommodations rented for less than 180 consecutive days. This tax primarily affects guests staying in hotels, resorts, and short-term vacation rentals. The state TAT rate is currently 10.25%.

In addition to the state TAT, counties also have the authority to impose their own TAT surcharges. For example, Hawaii County levies a 3% surcharge on transient accommodations. A bill passed by the Hawaii State Legislature will increase the state TAT rate from 10.25% to 11% starting January 1, 2026.

Hawaii also imposes an estate tax, which applies to the estates of deceased individuals. For deaths occurring in 2025, estates valued at more than $5.49 million are subject to this tax. The Hawaii estate tax features progressive rates, ranging from 10% to 20%, applied only to the portion of the estate that exceeds the exemption threshold. It is important to distinguish this from an inheritance tax, as Hawaii does not levy an inheritance tax on beneficiaries receiving assets from an estate.

Other taxes in Hawaii include specific excise taxes on certain goods. There is a state gasoline tax of 16 cents per gallon, with additional county gasoline taxes that can bring the total to between 32.5 cents and 40 cents per gallon depending on the county. A state excise tax of $3.20 is also levied on each pack of cigarettes.