State of Hawaii Sales Tax The 2016 Hawaii State Sales Tax

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What is the 2016 Hawaii Sales Tax Rate?

Hawaii Sales Tax Rate

4.00%

2016 Hawaii state sales tax
Exact tax amount may vary for different items

The Hawaii state sales tax rate is 4%, and the average HI sales tax after local surtaxes is 4.35%.

  • Counties and cities can charge an additional local sales tax of up to 0.5%, for a maximum possible combined sales tax of 4.5%
  • Hawaii has 69 special sales tax jurisdictions with local sales taxes in addition to the state sales tax
  • Hawaii has a higher state sales tax than 86.5% of states

While Hawaii does not have a sales tax, it does have a gross receipts tax known as the "General Excise Tax" which applies to almost all sales (including goods and services). The General Excise tax is charged to the business rather then the customer, but the business may pass some or all of the tax on to their customers similar to a traditional sales tax.

Hawaii strictly imposes a use tax on products or services that are purchased from other states but "landed" (used) in Hawaii. This includes non-tangible products of services, like consulting or building designs. If a building blueprint is contracted from an out-of-state architect, for example, the architect would be expected to pay a 4% General Excise Tax to Hawaii.

The "sales tax" in Hawaii has a includes many more goods services than most states, so Hawaii's general excise tax revenues are larger then many states' sales tax revenues, even those with higher sales tax rates.

If you are a Hawaii business owner, you can learn more about how to collect and file your Hawaii sales tax return at the 2016 Hawaii Sales Tax Handbook .

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Hawaii Sales Tax Exemptions

Hawaii does not exempt any types of purchase from the state sales tax. In most states, necessities such as groceries, clothes, and drugs are exempted from the sales tax or charged at a lower sales tax rate.

Some items may not be eligible for these reduced sales tax rates, such as expensive clothing, unhealthy food or drinks like soda, and certain non-essential pharmaceuticals. Unlike many states, Hawaii treats both candy and soda as groceries for sales tax purposes. Other items including gasoline, alcohol, and cigarettes are subject to various Hawaii excise taxes in addition to the sales tax.

In some states, items like alcohol and prepared food (including restaurant meals and some premade supermarket items) are charged at a higher sales tax rate. The HI sales tax applicable to the sale of cars, boats, and real estate sales may also vary by jurisdiction. Hawaii's sales tax rates for commonly exempted items are as follows:

Groceries: 4% Clothing: 4% Prepared Food: 4% Prescription Drugs: 4% Non-Prescription Drugs: 4%
Hawaii sales tax for a restaurant meal
$100 Restaurant Dinner
Hawaii sales tax for groceries
$100 of groceries
Hawaii sales tax for clothing
$100 in clothes
Hawaii sales tax for general consumer products
$100 of consumer products
$4.00 sales tax
$104.00 total
$4.00 sales tax
$104.00 total
$4.00 sales tax
$104.00 total
$4.00 sales tax
$104.00 total

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Hawaii Sales Tax Exemption Certificate

Unlike a Value Added Tax (VAT), the Hawaii sales tax only applies to end consumers of the product. Individuals and companies who are purchasing goods for resale, improvement, or as raw materials can use a Hawaii Sales Tax Exemption Form to buy these goods tax-free.

Companies or individuals who wish to make a qualifying purchase tax-free must have a Hawaii state sales tax exemption certificate, which can be obtained from the Hawaii Department of Taxation . On making an exempt purchase, Exemption Certificate holders may submit a completed Hawaii Sales Tax Exemption Form to the vendor instead of paying sales tax.

Sales tax exemption forms (as well as business sales tax id applications, sales tax returns, and the full Hawaii sales tax code) can be downloaded from the Hawaii Department of Taxation here .

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Hawaii Sales Tax Calculator

 Sales Tax Calculator
Purchase Details:
$ in zip code Enter the zip code where the purchase was made for local sales tax

Whenever you make a purchase at a licensed Hawaii retailer, your sales tax will be automatically calculated and added to your bill. To lookup the sales tax due on any purchase, use our Hawaii sales tax calculator.

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Hawaii Use Tax [View Main Article]

If you buy goods and are not charged the Hawaii Sales Tax by the retailer, such as with online and out-of-state purchases, you are supposed to pay the 4% sales tax (less any foreign sales tax paid) for these items yourself as the Hawaii Use Tax.

Your are expected to voluntarily list your liable purchases on a Hawaii Use Tax Return, which should be attached with payment to your Hawaii Income Tax Return. Historically, compliance rates with with the Hawaii Use Tax have been low.

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Hawaii Local Sales Taxes

Hawaii does not allow local jurisdictions like cities or counties to collect a local sales tax. The Hawaii state sales tax of 4% is applicable statewide. You can view the sales tax rates for various cities in Hawaii here.


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