Hawaii lesson 5 of 6
Hawaii LLC taxes: the General Excise Tax, not sales tax
Hawaii has no LLC franchise tax and no traditional sales tax. Instead, the General Excise Tax, commonly called GET, applies to almost all gross business receipts, including services, which surprises owners moving from sales-tax states.
The General Excise Tax
GET is a tax on the privilege of doing business in Hawaii, imposed on gross income or gross receipts from virtually all business activity, including sales of goods, services, rents, and commissions, not just retail sales as with a conventional sales tax. Most activity is taxed at 0.5%, retailing and most other business activity at 4%, though rates vary by activity type.
Counties may add a surcharge of up to 0.5% on top of the state GET rate. The City and County of Honolulu has adopted this surcharge, bringing the combined rate on Oahu to 4.5% for most retail activity, while counties that have not adopted a surcharge remain at the base state rate.
How members are taxed
A Hawaii LLC taxed as a pass-through for federal purposes passes income through to its members, who pay Hawaii's graduated individual income tax, with a top marginal rate that is among the highest in the country. An LLC that elects C corporation tax treatment instead owes Hawaii's corporate income tax, which is also graduated.
GET is charged to the business, but most businesses pass some or all of it on to customers as a separate line item, similar in practice to sales tax even though it is legally structured differently.
Key takeaways
- GET applies to almost all gross business receipts, including services, not just retail sales.
- The base state GET rate is 4% for most business activity, plus up to a 0.5% county surcharge where adopted, such as Oahu's combined 4.5%.
- Pass-through LLC members pay Hawaii's graduated individual income tax on their share of profit; a C-Corp election pays Hawaii corporate income tax instead.
Frequently asked questions
Is the General Excise Tax the same as sales tax?
No. GET is levied on the business's gross receipts from nearly all activity, including services, while a sales tax is typically charged only to the customer on retail goods. Hawaii has no separate sales tax.
Do all Hawaii counties charge the same GET rate?
No. The base state rate is 4% for most activity, and counties can add a surcharge of up to 0.5%. Honolulu has adopted the surcharge; confirm the current rate for your county with the Department of Taxation.
Official sources
Or let us file your Hawaii LLC for you
Everything above is yours to use for free. If you would rather hand it over, we prepare and file the Articles of Organization for Limited Liability Company (Form LLC-1), act as your registered agent, and track your ongoing deadlines.
Last reviewed: September 2026 - reviewed by Gullia Filing Legal & Formation Team