Hawaii's tax system is unlike any other state's. Instead of a retail sales tax, it charges a General Excise Tax (GET) on the gross receipts of almost every business, including professional services. On top of that, Hawaii has a corporate income tax of up to 6.4% and a personal income tax that reaches 11%, the second-highest top rate in the country. Formation and annual fees, by contrast, are among the lowest anywhere.
This guide explains Hawaii's business taxes for 2026, including how the GET works in practice, and compares Hawaii with other high-cost states. If you are moving a business from the mainland, expect the GET to be the biggest adjustment, because it applies to services and business-to-business sales that most states leave untaxed.
General Excise Tax (GET)
The GET applies to gross receipts from business activities in Hawaii. Unlike a sales tax, it falls on the business, and it applies to services, rents, commissions and many transactions that are exempt in other states.
| Activity | Rate |
|---|---|
| Retail sales and most services | 4% |
| Retail sales and services on Oahu, Kauai and Hawaii Island (with county surcharge) | 4.5% |
| Wholesale and manufacturing | 0.5% |
| Insurance commissions | 0.15% |
Because the tax is on gross receipts, it pyramids: the same product can be taxed at several stages. The 0.5% wholesale rate limits that effect for goods, but business-to-business services often pay the full 4%.
Businesses can pass the GET on to customers. Because the amount passed on is also gross income, the maximum visible rate on Oahu is 4.712% rather than 4.5%.
Every business needs a GET license from the Department of Taxation, which costs $20. Returns are filed monthly, quarterly or semiannually, plus an annual reconciliation.
Corporate income tax
| Taxable income | Rate |
|---|---|
| $0 to $25,000 | 4.4% |
| $25,000 to $100,000 | 5.4% |
| Over $100,000 | 6.4% |
Hawaii uses a three-factor apportionment formula for most corporations. Corporate returns (Form N-30) are due on the 20th day of the fourth month after year-end.
Personal income tax and pass-through owners
Hawaii has twelve brackets for single filers in 2026:
| Taxable income (single) | Rate |
|---|---|
| $0 to $9,600 | 1.4% |
| $9,600 to $14,400 | 3.2% |
| $14,400 to $19,200 | 5.5% |
| $19,200 to $24,000 | 6.4% |
| $24,000 to $36,000 | 6.8% |
| $36,000 to $48,000 | 7.2% |
| $48,000 to $125,000 | 7.6% |
| $125,000 to $175,000 | 7.9% |
| $175,000 to $225,000 | 8.25% |
| $225,000 to $275,000 | 9% |
| $275,000 to $325,000 | 10% |
| Over $325,000 | 11% |
A 2024 law widens the brackets and raises the standard deduction in stages through 2031, meaning most residents see lower bills each year. Owners of LLCs, partnerships and S corporations pay these rates on their share of profit, and Hawaii allows an elective pass-through entity tax to help with the federal SALT cap.
Other Hawaii business taxes
- Transient accommodations tax: 11% from January 1, 2026, after a 0.75-point increase to fund climate resilience, plus a 3% county tax.
- Use tax: 4% on goods imported for resale or consumption, or 0.5% for imports by wholesalers and manufacturers.
- Unemployment insurance: Employers pay on a high wage base that is set at 90% of the state average wage, well above $60,000.
- Temporary disability insurance (TDI) and Prepaid Health Care requirements add to payroll costs.
- Property tax: Set by each county. Commercial rates are higher than residential rates, but Hawaii's overall property tax rates are low by national standards.
Forming a business in Hawaii: fees and ongoing costs
| Item | LLC | Corporation |
|---|---|---|
| Formation filing fee | $50 | $50 |
| Annual report | $15 ($12.50 online) | $15 ($12.50 online) |
| GET license | $20 one time | $20 one time |
| Registered agent | Required | Required |
Worked example: $500,000 of profit
| Step | Amount |
|---|---|
| Taxable income | $500,000 |
| Hawaii corporate tax | $30,750 |
| Federal tax at 21% on $469,250 | $98,543 |
| Total income tax | $129,293 (25.9%) |
The GET applies on top, based on gross receipts rather than profit. A service business with $2 million of Oahu revenue would owe about $90,000 in GET before any income tax.
For a single LLC owner with $150,000 of Hawaii taxable income, state income tax is about $10,366. At $75,000 it is about $4,591.
How Hawaii compares
Hawaii has no neighbors, so here it is next to other high-cost states:
| State | Corporate rate | Top personal rate | Sales or gross receipts tax |
|---|---|---|---|
| Hawaii | 6.4% | 11% | 4% to 4.5% GET |
| California | 8.84% | 13.3% | 7.25% sales tax |
| Alaska | 9.4% | None | Local only |
| Oregon | 7.6% | 9.9% | None, plus CAT |
Choosing an entity in Hawaii
The GET applies regardless of entity type, so entity choice affects only income tax. Pass-through owners face personal rates up to 11%, while C corporations pay at most 6.4%. That makes the C corporation relatively more attractive in Hawaii than in many states for profitable businesses that reinvest, although profits paid out as dividends are taxed again at personal rates.
Tax planning tips for Hawaii businesses
Price for the GET. Many new businesses forget the GET entirely and treat it as an expense instead of passing it on. If your contracts allow, add the GET to invoices at the maximum pass-on rate.
Use the wholesale rate where it applies. Sales of goods to another business for resale, and some services provided to a business that resells them, qualify for the 0.5% rate. Keep resale certificates on file to support the lower rate.
Understand exported services. Services performed in Hawaii for customers outside the state can be exempt from the GET if the benefit is used entirely outside Hawaii. Consulting firms and software developers serving mainland clients should document where their customers use the services.
Register for the right GET accounts on each island. The county surcharge applies based on where the sale is made or the service is used. A business serving customers on Maui and Oahu reports receipts by county on its GET return so the right surcharge is applied.
Recent changes for 2025 and 2026
- Income tax relief continues to phase in, with wider brackets and higher standard deductions in 2026.
- Transient accommodations tax rose to 11% in 2026.
- GET exemptions for some medical services and groceries have been debated but not broadly enacted.
Is Hawaii a good state for business?
Advantages
- Very low formation and annual report fees
- Moderate corporate tax rate
- Strong tourism, defense and hospitality markets
- Income tax cuts phasing in for residents
Drawbacks
- GET applies to almost all gross receipts, including services
- Top personal rate of 11%
- High payroll obligations, including required health insurance
- Very high costs for shipping, energy and housing
Compliance checklist
- File Articles of Organization or Incorporation with the Business Registration Division.
- Get a GET license and register for withholding through Hawaii Tax Online.
- Register for unemployment insurance and arrange TDI and prepaid health coverage.
- File GET returns and the annual reconciliation (Form G-49).
- File the annual report with the state.
- File Form N-30, N-35 or N-20 for income tax each year.
Compare Hawaii with similar states below or estimate your income taxes with the United States calculator. See LLC taxes for more.