Hawaii Sales Tax and Use Tax
What is the Hawaii sales tax?
Taxes in Hawaii are destination-based, meaning the Hawaii sales tax rate is based, or determined from, the destination location an item is shipped to. This complicates business for retailers who need to have the exact and up-to-date sales tax rate for every shipment they make.
To see a full breakout of Hawaii sales tax rates by state, county, city and special district, use our easy Hawaii sales tax calculator. After putting in any ZIP code, you can enter a retail price to calculate Hawaii sales tax totals.
What is the Hawaii use tax?
The Hawaii state use tax rate is the same as the state, county, city and special district rates.
If you reside in HI, use tax is due to the state on any and all transactions where sales tax has not been paid, even out-of-state internet sales.
Who has to pay Hawaii sales tax or use tax?
In general, a business must collect and remit all applicable Hawaii sales taxes if that business has nexus, a physical presence such as a brick-and-mortar location, within a given state. The presence of an employee or salesperson, delivery by the seller's vehicle, and storage of materials usually establishes nexus as well.
Hawaii says that an out-of-state seller is required to collect tax if they can be defined as "persons engaging in business". Hawaii does not currently have additional laws establishing nexus for other reasons such as out-of-state businesses using in-state affiliates, advertisers or vendors, or businesses that make internet sales or mail catalogs.
If you are not sure if you have established nexus in Hawaii, you can usually get free help by contacting the Hawaii Department of Taxation. Click here for an updated listing of direct phone numbers. You could also contact a qualified certified public accountant or lawyer who specializes in tax law in Hawaii. Click here for listing of recommended resources.
Special rules applying to Hawaii sales tax and use taxes
- Shipping is taxable.
- Finance charges are subject to sales tax.
- Clothing is taxed at the same rate as the general sales tax.
- Hawaii Sales tax holidays have been held in the past, but have not been authorized yet this year.
Since Hawaii legislators can vote to change the Hawaii sales tax and use tax rates at any time, it is very difficult for individuals to keep track of the changes. The population of HI state is also rapidly changing, which can cause frequent updates to the ZIP codes and local municipality names and complicates the job of keeping track of Hawaii sales tax jurisdictions.