What is Hawaii General Excise Tax?

Briefly, General Excise Tax (GET) covers virturally every transaction which occurs in Hawaii. It is similar to a sales tax, with the primary difference being that the tax is collected from (and due from) the seller - and not the buyer.

What is the GET Tax Rate?

GET has different rates on different islands.

Maui County: 4.00%

Kauai and Oahu: 4.5%

Big Island: 4.25%

Why is the GET I pay at retail slightly higher than the posted rates?

Amounts collected are higher because payors of the tax are required to included GET collections in their gross sales. The math is a bit convoluted, but what it amounts to is that the payors of the tax (merchants, contractors, professional services providers, retailers, etc) are paid a very, very small premium for collecting and remitting the tax. For instance, in Maui you pay 4.167% instead of the 4.00% posted flat rate. Where does the 0.167% come from? It is in essence a 4% tax collected on the 4% tax you are being charged. Let that one sink in...

Is anyone exempt from GET?

Very few transactions are exempt from GET. Insurance premiums have a special lower rate and not profits are not charged GET on the donations they receive. There are other very tightly defined niches of exemption. Generally speaking, if you're asking this question, you are unlikely to be exempt from GET

When I buy something, I'm not always charged GET - does that mean the seller is not paying it?

It means the seller is not collecting it from you - which is his option. But he is paying 4% of the transaction (if he is complying with the law) to HI Dept. of Tax. Sellers are free to either not collect the tax (and presumably build it into the untaxed price) or collect it and disclose the amount. The vast majority of Hawaii retail merchants collect the tax.

Is the tax rate different for wholesalers?

Yes. A wholesale rate of 0.5% applies to transactions which involve sales to parties who are not end users. For instance, a beverage company selling cases of softdrink to a convenience store must pay 0.5% of the transaction as GET. The convenience store then charges an additional (regual retail rate) tax of 4.00% (Maui) to the person who buys and drinks the beverage.

Can contractors charging full retail rate to end users exempt amounts paid to their subcontractors?

Yes, but general contractors are required to provide the name and GET registration numbers of the subcontractors in order to take these exemptions. It should be noted that the subontractors themselves owe 4.0% (Maui) on the amounts they collect from the general contractors.

Can the subcontractors charge GET to their general contractor customers?

They can - and they should. Many fail to do this and are non-the-less responsible for the tax.

When are returns for GET due?

Periodic returns may be due at different frequencies depending on the amount of tax due.

Monthly: If you will be remitting over $4,000 in GET on an annual basis. In other words, if you believe your annual sales will be above approximately $100,000 (Maui) you would file monthly.

Quarterly: If you will be remitting over $2,000 but less than $4,000 in GET on an annual basis. In other words, if you believe your annual sales will be over 50,000 but less than $100,000 (Maui) you would file quarterly.

Semi-annually (twice yearly): If you will be remitting less than $2,000 in GET on an annual basis. In other words, if you believe your annual sales will less than approximately $50,000 (Maui) you would file twice a year.

What is the difference between the G-45 and the G-49 Forms?

The G-45 is the 'periodic' form which is filed either monthly, quarterly, or semiannually. The G-49 is the annual or so called "reconcilliation" form which is filed annually. The G-49 is used to report annual sales and correct any errors or differences between your periodic reporting on G-45 and your finalized annual sales.

When are GE-45 Forms due?

The G-45 filings are due on the 20th of the month following the end of the period for which you are reporting. For instance, if you are a monthly filer, the January GET return is due February 20. If you are a quarterly filer, your 2nd quarter return is due on July 20. Semiannual returns are due July 20 and on January 20th.

When are G-49 Forms due?

The G-49 is due on April 20 of each year for the previous calendar year. For instance your 2018 G-49 is due on April 20, 2019.

What happens if I don't file?

For a long time, sometimes nothing. But enforcement for GET (historically lax) is improving. If you are not filing your GET returns, you are almost certain (at some point - and it can take years) to be subjected to enforcement or audit if you are filing income tax returns and have a GET tax number. It doesn't pay to avoid filing and remitting GET. Businesses can be ruined when they receive back tax bills for years of unpaid GET.

Are there penalties? How much interest is due on late payments.

If you file and pay your GET late, the penalty is 5% per month of the tax due - to a maximum of 25%. Interest is charged (as of July, 2019) at 2/3 of 1% per month. (8% APR)