So What Is GET, Exactly?
If you run a business in Hawaii, you've probably heard the term "GET" thrown around. Maybe your accountant mentioned it, maybe you saw it on a receipt, or maybe you just got a letter from the Department of Taxation that made your stomach drop.
GET stands for General Excise Tax. It's Hawaii's version of a tax on doing business. Every dollar your business brings in — whether you're a contractor, a freelancer, a landlord, or running a retail shop — is subject to GET.
And I mean every dollar. There's no minimum threshold. There are no write-offs or deductions. If you have a GET license and you're doing business in Hawaii, you owe it.
Here's where it gets important: GET is not a sales tax. It's a tax on your business, not on the customer. The fact that you can pass it on to customers doesn't change who's legally on the hook for it — and that's you.
The Rates: 4% vs. 4.5% vs. 4.712%
The base GET rate across the state is 4%. But every county in Hawaii has added a 0.5% surcharge on top of that, which means the effective rate is 4.5% no matter which island you're on — Oahu, Maui, Big Island, or Kauai.
Simply put, if your client pays you $1,000, you owe $45 in GET.
Now, if you choose to visibly pass GET on to your customers (which I strongly recommend), you are actually allowed to pass on a rate of 4.7120%.
Here's why: when a client pays you that extra amount to cover your GET, that payment is also income to your business — which means it's also subject to GET. The 4.7120% rate is calculated to account for that so you actually come out whole.
You collect $1,045. But you owe 4.5% GET on $1,045 = $47.03.
You collected $45 but owe $47.03 — you're short $2.03.
You collect $1,047.12. You owe 4.5% GET on $1,047.12 = $47.12.
You collected $47.12, you owe $47.12 — you're whole.
It's a small difference on one invoice, but across a full year of revenue it adds up. Use the right rate and the math works in your favor.
GET vs. Sales Tax — Why It Matters
People who move to Hawaii from the mainland often assume GET works like the sales tax they're used to. It doesn't.
A sales tax is charged to the consumer at the point of sale. The business collects it and passes it along to the state — the business is just the middleman.
GET is different. It's a tax on the business's gross receipts. That means it applies to everything you bring in — not just retail sales, but also services, rent, contracting, commissions, and even business-to-business transactions. You're taxed on your gross revenue, not your profit.
This is why GET can hit harder than people expect, especially for businesses with tight margins or heavy subcontractor costs.
Who Actually Owes GET?
Short answer: almost everyone doing business in Hawaii.
Sole proprietors, LLCs, partnerships, corporations, freelancers, contractors, landlords collecting rent — if you have income from business activity in Hawaii, you need a GET license and you need to be filing.
Even if you had zero revenue in a given period, if your GET license is active, you still need to file a return showing $0. Not filing a zero return can trigger penalties and estimated assessments from the state.
Why Not Passing GET On to Clients Is a Costly Mistake
This is the part where I see business owners leaving the most money on the table. In Hawaii, you are legally allowed to add GET to your invoices and have the client pay it. This is standard practice, it's fully allowed, and most clients expect it.
Say your business brings in $150,000 a year. At 4.5%, that's $6,750 in GET — straight out of your pocket if you're not passing it on. Over five years, that's nearly $34,000 you could have collected from your customers instead.
Exemptions and Lower Rates — They Exist, but Tread Carefully
While most business activity is taxed at the standard 4% (plus the county surcharge), not everything falls into that bucket.
Certain activities are taxed at a lower rate. Wholesaling, manufacturing, and producing are taxed at just 0.5%. So if your business sells to other businesses for resale, your rate could be significantly lower.
There are also exemptions that can reduce or eliminate GET on specific income. Exported services — work you perform in Hawaii for an out-of-state client — may qualify. The subcontractor deduction allows construction companies to deduct the cost of hiring a subcontractor. And there are others depending on your industry.
Here's the thing: figuring out which exemptions apply can get complicated fast. The rules are specific, the documentation requirements are real, and claiming something you don't qualify for can result in back taxes, penalties, and interest.
If you think your business might qualify, this is one of those areas where it's worth getting professional guidance. I'm always happy to take a look.
The Filing Basics
Once you have your GET license (a one-time $20 fee through Hawaii Tax Online), you'll file periodic returns using Form G-45. The state assigns you a monthly, quarterly, or semi-annual frequency based on your volume. Returns are due on the 20th of the month following each period.
On top of that, every business files an annual reconciliation — Form G-49 — by April 20th of the following year, even if you've been filing your periodic returns on time.
Late filing comes with a 5% per month penalty on the unpaid tax, up to 25%. Interest runs at two-thirds of 1% per month on top of that. These add up fast.
If your bookkeeping isn't keeping pace with your filing schedule, it's worth getting that sorted out. Moving to monthly bookkeeping, even if you file quarterly, keeps you ahead of the deadlines.
Bottom Line
GET is straightforward in concept but easy to get wrong in practice. The biggest mistakes I see are businesses not passing it on to clients, not filing on time, and not claiming exemptions they're entitled to.
If any of this sounds familiar, or if you're just getting started with a business in Hawaii and want to make sure you're set up right, I'm happy to help. This is exactly the kind of thing I work with Hawaii business owners on every day.
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