Hawaii does not have a traditional sales tax

Hawaii is one of five U.S. states without a sales tax. Instead, the state uses a General Excise Tax (GET) that functions differently from sales tax in most other states. The GET is a gross receipts tax — it applies to the seller's revenue, not just the final sale to a consumer. This means the tax can layer: a manufacturer pays GET, then a wholesaler pays GET on the same goods, then a retailer pays GET again.

The GET rate is 4% statewide, though counties can add a local surcharge. Hawaii County (Big Island), Honolulu County, Kalawao County, and Maui County each add 0.5%, bringing their total to 4.5%. The rate applies to most goods and services, including groceries, prepared food, and retail purchases — categories that are often tax-exempt elsewhere.

Because GET is collected from businesses rather than at the register, you will not see it listed separately on your receipt the way sales tax appears in other states. The tax is already built into the price you pay.

Key Takeaways

  • Hawaii's General Excise Tax of 4% (or 4.5% in some counties) replaces sales tax and is collected from sellers, not consumers at checkout.
  • The GET applies to groceries, food, and most services — categories often exempt from sales tax on the mainland.
  • Because GET is a gross receipts tax, the same item can be taxed multiple times as it moves through the supply chain.
  • The tax is built into prices rather than shown separately on receipts, so you cannot see the exact amount paid.

How the General Excise Tax differs from sales tax

A sales tax in most states applies only at the final sale to a consumer. A business buys inventory tax-free, marks it up, and the customer pays sales tax on the retail price. The tax is collected once, at the end of the chain.

Hawaii's GET applies at every stage. A manufacturer selling to a wholesaler pays 4% GET on that sale. The wholesaler then pays 4% GET on the sale to a retailer. The retailer pays 4% GET on the sale to you. This layering effect means the same product is taxed multiple times, which is why Hawaii's effective tax burden can be higher than the 4% rate suggests.

The GET also covers services — haircuts, repairs, professional fees, and entertainment — in ways that sales tax often does not. Groceries and prepared food are both subject to GET, whereas many states exempt groceries or tax prepared food at a different rate.

What is and is not subject to the General Excise Tax

The GET applies to the sale of tangible goods and most services. This includes:

  • Retail purchases (clothing, electronics, furniture)
  • Groceries and food items
  • Prepared food and restaurant meals
  • Services (haircuts, repairs, professional services, entertainment)
  • Accommodations (hotel rooms, vacation rentals)
  • Utilities (electricity, water, gas)

A narrow list of items and activities is exempt from GET. These include:

  • Sales between businesses for resale (with a resale certificate)
  • Certain agricultural products sold by farmers
  • Some medical services and prescription drugs
  • Insurance premiums
  • Certain nonprofit and government transactions

The exemptions are limited compared to other states. If you are buying something for personal use in Hawaii, assume GET applies unless you have a specific reason to believe otherwise.

County surcharges and how they work

Four of Hawaii's five counties add a 0.5% surcharge on top of the state GET rate. Honolulu County (which includes Oahu), Hawaii County (Big Island), Maui County, and Kalawao County all charge 4.5% total. Kalawao County is the smallest and least populated.

The surcharge is collected by the same mechanism as the state GET — built into prices, not shown separately on receipts. If you shop in Honolulu, you pay 4.5%. If you shop in Hilo (Hawaii County), you also pay 4.5%. If you shop in Kauai (Kauai County), you pay only the state rate of 4%.

These surcharges fund county services and infrastructure. They have been in place for decades and are unlikely to change, though rates can be adjusted by county ordinance.

How GET affects the cost of living in Hawaii

The layering effect of GET makes it a significant cost factor. A product that costs $10 to manufacture might be taxed at 4% when sold to a wholesaler ($10.40), then taxed again at 4% when sold to a retailer ($10.82), then taxed a third time at 4% when sold to you ($11.25). The final price reflects multiple rounds of taxation on the same good.

This structure contributes to Hawaii's reputation as an expensive place to live. Groceries, utilities, and everyday goods all carry the cumulative weight of GET. A family's grocery bill includes GET on every item, and a utility bill includes GET on the service itself.

Visitors to Hawaii should expect prices to be higher than on the mainland, and the GET is one reason why. A $20 meal in a restaurant will cost more in Hawaii than the same meal in a state with sales tax, because GET applies to the full transaction and has already been layered through the supply chain.

Resale certificates and business purchases

If you own a business in Hawaii, you can avoid paying GET on inventory you purchase for resale by providing a resale certificate to your supplier. The certificate tells the supplier that you will be the one paying GET when you sell the item to a customer, not them.

To obtain a resale certificate, you must register with the Hawaii Department of Taxation and receive a General Excise Tax license. The process is done through the state's online system. Once you have the license, you can issue resale certificates to suppliers for any goods you buy for resale.

Without a resale certificate, you pay GET on your purchase, and your customer pays GET again on the retail sale — the layering effect in action. Resale certificates prevent this double taxation for legitimate business transactions.

Planning for GET when budgeting or relocating

If you are moving to Hawaii or budgeting for a trip, factor GET into your costs. A 4% to 4.5% tax on most purchases is higher than sales tax in many states, and it applies to categories — groceries, utilities, services — that are often tax-free or taxed at lower rates elsewhere.

Groceries are a good example. In many states, groceries are exempt from sales tax entirely. In Hawaii, you pay GET on every grocery purchase. Over a year, this adds up significantly for a family.

Utilities are another area where GET increases costs. Your electric bill, water bill, and gas bill all include GET. These are fixed expenses that you cannot avoid, so the tax burden is unavoidable.

When comparing the cost of living in Hawaii to other states, remember that the GET is built into prices. You will not see it listed separately, but it is there in every transaction.

Frequently Asked Questions

Do I pay sales tax when I buy something in Hawaii?

No, Hawaii does not have sales tax. Instead, you pay the General Excise Tax (GET) of 4% statewide, or 4.5% in four counties. The GET is built into the price, so you will not see it listed separately on your receipt the way sales tax appears in other states.

Is food subject to GET in Hawaii?

Yes. Both groceries and prepared food are subject to the 4% General Excise Tax. This is different from many states, where groceries are exempt or taxed at a lower rate. The GET applies to your entire grocery bill and to restaurant meals.

Why does Hawaii use GET instead of sales tax?

Hawaii adopted the General Excise Tax in 1935 as a way to tax business activity and revenue. The state has kept this system rather than switching to a sales tax model. The GET is collected from businesses at each stage of the supply chain, not at the point of sale to consumers.

Can I get a refund of GET if I buy something and return it?

Yes. When you return an item, the retailer refunds the GET along with the purchase price. The refund process is the same as in states with sales tax — the tax is reversed when the sale is reversed.

Do online purchases from Hawaii retailers include GET?

Yes. If you buy from a Hawaii business, GET applies to the transaction. If you buy from an out-of-state retailer and have it shipped to Hawaii, GET may or may not explore depending on the retailer's nexus in Hawaii and current tax law. The rules for online sales are complex and change frequently.