Hawaii Sales Tax Guide
Chapter 3: Getting registered to collect Hawaii sales tax
The first step toward proper management of Hawaii general excise tax involves getting registered with the Hawaii Department of Taxation. We get a lot of questions regarding this and recognize it may be the most difficult hurdle for small businesses to overcome. Registering to collect general excise tax in Hawaii means you've acknowledged your legal responsibility to collect and consequently file and remit sales tax to the state.When do I need to register to collect general excise tax in Hawaii?
There are two ways to think about this question. The first involves a topic called "nexus". Nexus, in the tax world refers to a company's connection to a state. While this connection is typically that of a physical nature (warehouse in the Hawaii, inventory in Hawaii, etc.), nexus is not limited to a physical presence. There are many nexus triggers we won't delve into here and, more importantly, nexus is often determined by a combination of events rather than a single event.
If it is determined you have nexus in Hawaii, the Hawaii Department of Taxation has the legal right to require you to collect, file, and pay general excise tax.
If you've determined you have nexus in Hawaii, the second question involves a topic we call "materiality". In short, you'll want to ask yourself whether the amount of general excise tax you are required to collect and remit to the Hawaii Department of Taxation is enough to put you at an unacceptable level of penalty and interest risk. As everyone's level of risk tolerance is different, this is a question that can only be answered by you, the business owner.
Prior to selling taxable goods or offering taxable services in Hawaii, a business that has established nexus within the state is required to register for an General Excise Tax (GET) License.What triggers nexus in Hawaii?
Nexus is a complex topic that, depending on your situation, may require the in-depth knowledge of a qualified tax professional. That being said, there are a few common business events and situations that are known to trigger nexus in Hawaii. The most common include the following:
- Opening an office in Hawaii
- Storing inventory in a warehouse in Hawaii
- Having remote employees located in Hawaii
Businesses may register for an Hawaii General Excise Tax (GET) License online by visiting the Hawaii Department of Taxation and following the instructions provided.
It is also possible to get registered for a General Excise Tax (GET) License by completing and mailing in a Basic Business Application (BB-1), but this approach is not recommended. Form based registration is being phased out in favor of online registration. It’s fast, free, and more reliable than mailing in a completed paper form.What information is required to register for a Hawaii General Excise Tax (GET) License ?
When applying for a Hawaii General Excise Tax (GET) License, there are a number of pieces of information that may be required. These include, but are likely not limited to:
- Business name
- Business entity type
- Description of business activities
- Date business activities began or will begin
- Business address and mailing address
- Business contact information
- The North American Industry Classification System (NAICS) code that best matches your business
- Federal Employer Identification Number (FEIN)
- Your name, Social Security Number (SSN), driver license number, personal address, and personal contact information of owner/sole proprietor
- List of business officers, partners, managing members, and/or trustees
- Employment information (date of hire, number of employees, payroll amounts, payroll agent’s PTIN, if applicable)
The cost to register for a Hawaii General Excise Tax (GET) License is currently $20.Do I need a Federal EIN in order to register in Hawaii?
The Hawaii Department of Taxation requires businesses requesting a new General Excise Tax (GET) License to supply a valid Federal EIN number during the initial registration process. You can apply for an EIN number online by visiting the IRS website.Which Hawaii governement agencies do I need to register with in order to get a new General Excise Tax (GET) License?
We recommend you contact the Hawaii Department of Taxation to verify which government agencies you will be required to register with. Potential agencies include the following:
- Hawaii Department of Revenue
- Hawaii State Employment Agency
- Hawaii State Department of Labor
- Hawaii Local Tax Jurisdictions
Yes! Hawaii General Excise Tax (GET) License registration is unique to the state of a business. The Hawaii Department of Taxation requires all registered businesses to have current business owner name and contact information on file.