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Hawaii LLC Tax Requirements
and General Excise Tax
How to form an LLC in Hawaii
This Quick Start Guide is a brief overview of how to form an LLC in Hawaii.
Hawaii LLC costs:
State filing fee: $51 (one-time fee)
Annual fee: $15 (every year)
(check out Northwest vs LegalZoom)
Note: Our tax lesson is not as step-by-step as our LLC formation lessons, due to the uniqueness and variation among businesses. Taxes are usually not as straightforward as forming an LLC, and therefore, the information below is an overview, and not a comprehensive guide.
You will likely need to hire a local tax professional to make sure you meet all your Hawaii tax obligations. We recommend using Thumbtack.
Do it yourself in Hawaii
Hawaii Tax ID Number
You need to obtain a Hawaii Tax ID Number (from the HI Department of Taxation) after your LLC is formed. You also need to obtain any additional (and required) tax licenses.
You can obtain your HI Tax ID online (takes 3-5 business days) or by mail (takes 10-15 business days). The application fee in both cases is $20.
Here is Form BB-1 to file by mail (which includes instructions). Send your $20 fee, along with two copies of BB-1 to: Hawaii Department of Taxation, PO Box 259, Honolulu, HI 96809-0259.
Here is the link to file online. Click the “Use QuickFile”. Login with the email address and password you created (if you followed our Articles of Organization lesson). Click the “BB-1 Basic Business Application” link at the top to begin.
General Excise Tax
In addition to your federal and state income tax, you also need to file and pay Hawaii’s General Excise Tax (GET). It is a tax on the gross income of your business. The GET is either 0.5%, 4%, or 4.5% – it depends on your business activity and on which island your business is located.
0.5% tax: wholesaling goods, manufacturing, producing, providing wholesale services, and business activities of disabled people.
4 – 4.5%: selling retail goods and services, renting/leasing real property, construction, contracting, and earning commissions.
The GET tax is a bit similar to sales tax, but technically it is different. Sales tax is a tax on customers, whereas GET is a tax on your business.
You’ll apply for your GET license via Form BB-1 as mentioned above.
If you’ll pay less than $2,000 per year in GET, you need to file and pay every 6 months. If you’ll pay between $2,001-$4,000, you need to file and pay every quarter (3 months). If you’ll pay $4,001 or more, you need to file and pay every month. The more money you make, the faster the state wants it ;)
Additional Tax Licenses
You will need to apply for more tax licenses depending on the nature of your business.
If you have employees, you need to:
– withhold federal, state, and payroll taxes from your employees’ wages
– get a Federal Tax ID/EIN (see this lesson)
– get a Hawaii tax ID (mentioned above)
– get a Department of Labor Number, aka Employer Account ID Number (visit HI Dept. of Labor’s website and/or call them at 808-586-8844)
– get unemployment insurance
– obey Hawaii labor laws for worker’s compensation, temporary disability insurance, prepaid health care, and wage and hour programs.
Depending on your industry, where your business is located, how you are taxed by the IRS, and whether or not you have employees, will determine which additional taxes and forms are due.
Some examples of other taxes and forms due are:
- Use tax
- Individual income tax
- Income withholding tax
- Partnership and LLC tax
- Transient tax
- Accommodations tax
- Rental motor vehicle tax
- Tour tax
- Vehicle tax
- Car sharing tax
- Vehicle surcharge tax
- Cigarette and tobacco tax
- Liquor tax
- Fuel tax
- Local taxes
- And more
If you have more questions, please see the Hawaii Department of Taxation’s contact page.
Calculating your tax obligations in Hawaii can be complicated and if done improperly can negatively impact your LLC.
Hiring a tax professional will not only help you keep your Hawaii LLC in compliance, but it will also give you an advisor to go to for other business questions.
You’ll want someone who’s a good fit for your company, makes you feel comfortable, and is willing to answer all of your questions. It should be someone you like personally as well as professionally. We recommend talking with at least 2-3 people before making your final decision.