One way Hawaii raises tax revenue is through the imposition of a state sales tax. Hawaii uses the term “general excise tax” and also has use taxes. The state requires Hawaii businesses to register for a a sales tax ID number and permit. The businesses then collect sales tax on their customers’ purchases and submit the Hawaii sales taxes using state tax returns.
Register a business with the Hawaii Department of Commerce and Consumer Affairs Business Registration Division. As in all states, corporations and limited liability companies must register at the state level as a Hawaii business entity. General partnerships, limited partnerships, limited liability limited partnerships and limited liability partnerships must also register with the Hawaii Business Registration Division. Take the Hawaii business name you choose and use it when registering for a sales tax permit and ID number.
Obtain an IRS federal employer identification number if your particular business requires such a number. This depends on the type of business entity you have and whether it has salaried employees. For example, a nonprofit must always register even if it has no current employees on staff. Refer to the EIN instructions on the IRS.gov website to make this determination. You can search for those instructions with the website’s search feature.
Complete general Hawaii business registration. This includes Hawaii general excise tax registration, which is essentially a sales tax on Hawaii consumer purchases. The form to use for Hawaii business tax registration is the “State of Hawaii Basic Business Application.” You can access this sales tax permit application at state.hi.us/tax/2009/bb1_vp12.pdf. You can also find Hawaii tax payment vouchers in this packet of forms. Use those in conjunction with the other sales tax forms for Hawaii. You will get a Hawaii tax ID number for use taxes, general excise taxes and other business taxes once you submit the form.
Figure out how much to collect from your customers. You can get the Hawaii sales tax rates for the products or services you sell by looking at the FAQ for general excise tax. View them at www6.hawaii.gov/tax/a7_faq.htm#get. As of 2010, the Hawaii sales tax rate (general excise tax) is 4 percent for most transactions. However, there are exceptions. You may also need to pay an Oaho County surcharge tax of .5 percent. Refer to www6.hawaii.gov/tax/a2_b2_7csurchg_faq.htm if you sell goods on Oahu.
Get the necessary Hawaii sales tax filing forms (remember that you are looking for the term “general excise tax,” which is Hawaii’s version of a sales tax). You can see the list of Hawaii sales tax forms and instructions on the Hawaii Department of Taxation website at state.hi.us/tax/a1_b2_1geuse.htm.
Use the forms to submit all of the sales tax and other Hawaii business taxes. Make sure you read the tax returns and their instructions (or consult with a Hawaii business attorney) as soon as possible to avoid missing sales tax and other deadlines.
Hawaii Business Registration Form