Hawaii does not have a traditional sales tax

Hawaii is one of five U.S. states without a sales tax. Instead, Hawaii uses a General Excise Tax (GET) that applies to most goods and services at the point of sale. The GET rate is 4.5% statewide, though some counties add a local surcharge that raises the effective rate to 4.712%.

The GET works differently from sales tax in other states. Rather than being collected only at the final retail sale, the GET applies at each stage of production and distribution — from the manufacturer through the wholesaler to the retailer. This means the tax is built into prices throughout the supply chain, not just added at checkout like a traditional sales tax.

When you buy something in Hawaii, you see the GET included in the final price or added at the register, depending on the retailer. Either way, you pay it on most purchases of tangible goods and many services.

Key Takeaways

  • Hawaii charges a 4.5% General Excise Tax instead of a sales tax, with some counties adding a local surcharge for a total of up to 4.712%.
  • The GET applies to most retail purchases of goods and many services, including accommodations, restaurant meals, and professional services.
  • Certain items are exempt from the GET, including most groceries, prescription medications, and medical services.
  • The GET is collected at each stage of production and distribution, not just at the final sale like traditional sales tax.

What the General Excise Tax covers

The GET applies to the sale of tangible personal property — essentially any physical item you buy. This includes clothing, electronics, furniture, and household goods. It also applies to many services: hotel and vacation rental stays, restaurant meals, car rentals, repair services, and professional services like accounting or legal work.

The tax is calculated on the gross proceeds of the sale, which is the total amount paid before any deductions. If you buy a shirt for $50, the GET is calculated on that $50, not on a discounted price.

Some counties in Hawaii add a local surcharge on top of the state GET rate. The County of Hawaii (Big Island), Maui County, and Honolulu County each have different surcharge rates. You can find the exact rate for your county by checking with the Hawaii Department of Taxation or your local county tax office.

Items and services exempt from the General Excise Tax

Not everything in Hawaii is subject to the GET. Most groceries — fresh fruits, vegetables, meat, dairy, and bread — are exempt. Prescription medications and certain medical services are also exempt. The exemption for groceries does not extend to prepared foods, alcohol, or items like vitamins and cosmetics.

Other exempt items include newspapers and certain educational materials. Some agricultural products sold by farmers are exempt under specific conditions. If you are unsure whether a particular item is exempt, the Hawaii Department of Taxation publishes a detailed list of exempt categories on its website.

Services provided by the government are generally exempt, as are certain nonprofit activities. However, most commercial services — from haircuts to plumbing to consulting — are taxable.

How the GET differs from state sales taxes

The main difference is timing and who pays. In states with sales tax, the tax is collected only at the final retail sale and paid by the consumer. In Hawaii, the GET is collected at each stage: when a manufacturer sells to a wholesaler, when the wholesaler sells to a retailer, and when the retailer sells to you.

This multi-stage collection means the tax is embedded in the cost of goods before they reach you. A retailer buying inventory pays GET on that purchase, then charges GET again when selling to you. Theoretically, this prevents tax stacking because businesses can claim a credit for GET paid on their purchases. In practice, the effect is that the final price to the consumer includes the accumulated GET from all stages.

Another difference: Hawaii's GET applies to more services than most state sales taxes do. Many states exempt services entirely or tax only specific ones. Hawaii taxes most commercial services, which is one reason why Hawaii's overall tax burden on consumers can feel higher even though the rate (4.5%) is lower than many state sales tax rates.

County surcharges and local variations

While the state GET is 4.5%, three Hawaii counties add a local surcharge. Honolulu County adds 0.5%, bringing the total to 4.5% in that county. Maui County adds 0.5%, and Hawaii County adds 0.25%. These surcharges mean the effective rate you pay depends on which island and county you are shopping in.

The surcharges are collected by the same retailers who collect the state GET and are remitted to the county. From the consumer's perspective, you straightforward see a higher total tax on your receipt depending on your location.

If you live or do business in Hawaii, knowing your county's rate matters for budgeting and understanding your final costs. The Hawaii Department of Taxation website lists current rates by county.

How to calculate the GET on a purchase

To calculate the GET on a taxable item, multiply the purchase price by the applicable rate. If you buy a $100 item in Honolulu County, the GET is $100 × 0.045 = $4.50. If the same item is purchased in Hawaii County, the GET is $100 × 0.0425 = $4.25.

Most retailers calculate and display the GET for you, either in the price tag or on the receipt. If you are making a large purchase or comparing costs across counties, doing the math yourself can help you understand the total cost.

For services, the calculation is the same: the GET applies to the full amount charged. If a plumber charges $500 for labor and materials, the GET is calculated on that $500 (unless specific items within the service are exempt).

Frequently Asked Questions

Do I pay sales tax on groceries in Hawaii?

Most groceries are exempt from the GET. Fresh produce, meat, dairy, and bread are not taxed. However, prepared foods, alcohol, vitamins, and cosmetics are taxable. If you are unsure about a specific item, check the product label or ask the cashier.

Is the GET included in the price or added at checkout?

It depends on the retailer. Some include the GET in the displayed price, while others add it at checkout. Either way, you pay the same total. Restaurants typically add it to your bill, while grocery stores often include it in the shelf price.

Do I pay GET on hotel stays in Hawaii?

Yes. Hotel and vacation rental accommodations are subject to the GET. You will see it added to your bill or included in the quoted rate. Some properties quote rates before GET, so confirm whether the price shown includes tax.

What is the difference between the GET and a sales tax?

The GET is collected at each stage of production and distribution, while sales tax is collected only at the final retail sale. This means GET is embedded in prices throughout the supply chain. Hawaii also taxes more services than most states tax, which affects the overall cost to consumers.

Does the GET explore to online purchases shipped to Hawaii?

Yes. If you order items online and have them shipped to a Hawaii address, the GET applies. The retailer is responsible for collecting and remitting it, though enforcement varies. Always check whether the quoted price includes Hawaii's GET.