Hawaii (HI) levies a 4% state sales tax, making it essential for businesses to understand collection and remittance obligations. As of 2026, the LLC filing fee is $50 with no annual franchise tax.
Economic Nexus in Hawaii
Remote sellers must collect Hawaii sales tax if they exceed $100,000 in annual sales or 200 transactions within the state. This threshold has been in effect since 2020-01-01. Marketplace facilitators like Amazon and Etsy are also required to collect and remit tax on behalf of third-party sellers. The Hawaii Department of Taxation enforces these provisions and provides registration guidance at https://tax.hawaii.gov.
LLC Formation in Hawaii (2026)
Forming an LLC in Hawaii costs $50 for the initial filing. There is no annual franchise tax, keeping ongoing costs low. The annual report fee is $15. Hawaii imposes a state income tax, which affects pass-through LLC taxation.
The process involves filing Articles of Organization with the Secretary of State, obtaining a federal EIN, and registering for applicable state tax accounts. You will also need a sales tax permit from the Hawaii Department of Taxation.
Key Tax Rules
• Hawaii imposes a 4% General Excise Tax (GET) instead of a traditional sales tax.
• The GET is levied on the seller and can be passed to the buyer.
• Oahu has an additional 0.5% surcharge for public transit.
• Unlike sales tax, GET applies to services as well as goods.
Sales Tax Exemptions
The following categories are generally exempt from sales tax in Hawaii: prescription drugs, medical services. Businesses should maintain proper documentation for exempt transactions.