Flat-Fee Tax Preparation for Hawaii Residents

Hawaii has the highest top marginal income tax rate in the US at 11% on income over $200,000 (single) — even higher than California's 13.3% at lower income thresholds

Hawaii's General Excise Tax (GET) is a gross receipts tax at 4% (4.5% in Honolulu) imposed on virtually all business activity — rental income, services, and sales are all subject to GET

Hawaii does not conform to federal bonus depreciation and follows its own depreciation rules — a significant difference for real estate investors and business owners with capital assets

Hawaii imposes a separate Conveyance Tax on real estate transfers — rates range from 0.1% to 1.25% depending on value, with higher rates on investment properties and non-residents

Non-resident real estate sellers in Hawaii face a 7.25% withholding requirement on the sales price under HI's withholding tax on dispositions of HI real property

Short-term rentals in Hawaii (under 180 days) are subject to the GET plus the Transient Accommodations Tax (TAT) at 10.25% — creating a significant combined tax burden on Airbnb-type income

Hawaii's high cost of living and high tax rates make it one of the most expensive tax environments in the US for high-income earners, retirees, and real estate investors

HI does not impose a separate estate tax, though the high income and property taxes affect overall wealth accumulation in the state

Hawaii Real Estate Tax

Hawaii's real estate market features some of the highest property values in the US, with significant investor activity in vacation rentals and luxury properties. The GET on rental income, the TAT on short-term rentals, and Hawaii's non-conformity with federal depreciation create a complex tax environment for HI real estate investors. Non-resident sellers face mandatory withholding, and the conveyance tax adds to transactional costs.

Hawaii Business Tax

Hawaii businesses face the GET in addition to income tax — effectively a layer of taxation not seen in most states. The GET applies to gross receipts, meaning it is owed even when the business is operating at a loss. Professional service providers, landlords, and retailers all owe GET. Remote businesses that have economic nexus with HI customers may also have GET obligations.

Do I need to file a Hawaii state tax return?

If you are a HI resident or earned HI-source income above the filing threshold, you must file a HI return. Hawaii taxes its residents on worldwide income at rates up to 11%. Non-residents who own Hawaii real estate, operate a Hawaii business, or have other HI-source income must file a HI non-resident return.

What is the Hawaii General Excise Tax and do I owe it?

The Hawaii GET is a gross receipts tax on business activities conducted in HI. Unlike a sales tax, GET is imposed on the seller at 4% (4.5% in Honolulu) on all gross receipts from business activities — including rental income, service fees, and product sales. If you rent property in HI, operate a business in HI, or provide services in HI, you likely owe GET and must register with the HI Department of Taxation.

I own a vacation rental in Hawaii — what taxes do I owe?

Short-term rental income in Hawaii is subject to three taxes: (1) Hawaii income tax at rates up to 11%, (2) GET at 4%–4.5% on gross rental receipts, and (3) Transient Accommodations Tax (TAT) at 10.25% on gross rental receipts. The combined GET + TAT burden of roughly 14–15% on gross rental revenue is among the highest in the US. Platforms like Airbnb and VRBO collect and remit TAT on behalf of hosts in some cases, but GET compliance often remains with the property owner.

Does Hawaii conform to federal bonus depreciation?

No. Hawaii does not conform to federal bonus depreciation (100% first-year expensing under Section 168(k)). This means assets that are fully expensed on your federal return must be depreciated over their normal MACRS life on the HI return, creating a significant difference between federal and HI taxable income for businesses with capital expenditures. Cost segregation studies still benefit HI real estate investors by reclassifying assets, but the full bonus depreciation deduction is not available at the HI level.