Hawaii does not have a general sales tax
Hawaii is one of five U.S. states without a statewide sales tax. You will not see a sales tax line added to most purchases at checkout. However, Hawaii does have a general excise tax (GET) that functions similarly to sales tax in some ways but applies differently and at different rates depending on what you buy and who you are.
The general excise tax is a gross receipts tax, meaning it is calculated on the total amount a business receives, not just the profit. This tax is paid by the business, though it is often passed along to customers in the final price. Unlike a traditional sales tax that appears as a separate line item, GET is usually built into the displayed price.
Understanding what GET covers, what rates apply, and which purchases are exempt will help you predict your actual costs when shopping or doing business in Hawaii.
Key Takeaways
- Hawaii has no sales tax, but the general excise tax (GET) applies to most goods and services at rates between 0.5% and 4.712% depending on the type of business and transaction.
- The GET rate you pay depends on the seller's classification and the type of purchase — a grocery store pays a different rate than a restaurant or hotel.
- Some purchases are fully exempt from GET, including certain foods, prescription medications, and medical services.
- The GET is typically included in the displayed price rather than added at checkout, so the price you see is usually the price you pay.
How the general excise tax works in Hawaii
The general excise tax replaced Hawaii's sales tax in 1935. It is collected by the Hawaii Department of Taxation from businesses across the state. The rate varies by industry and type of transaction, ranging from 0.5% for certain wholesalers to 4.712% for most retail and service transactions.
Most consumers encounter the standard GET rate of 4% when buying goods at retail stores or paying for services. Hotels and accommodations charge 4.712%. Wholesalers and certain agricultural businesses pay lower rates. The tax is meant to be absorbed by the business and reflected in the price, though some businesses disclose it separately on receipts.
Because GET is a gross receipts tax rather than a sales tax, it can cascade — the same item may be taxed multiple times as it moves through the supply chain. This means the effective tax burden on a final product can be higher than the stated rate.
What is exempt from Hawaii's general excise tax
Several categories of purchases are fully or partially exempt from GET. Food for home consumption — groceries like bread, milk, vegetables, and canned goods — is exempt. However, prepared foods, restaurant meals, and items sold hot or ready-to-eat are taxed.
Prescription medications and certain medical devices are exempt. Over-the-counter drugs and vitamins are not. Medical and dental services provided by licensed professionals are exempt, as are certain health-related services.
Other exemptions include newspapers and periodicals, certain agricultural products sold by farmers, and some educational materials. Clothing is not exempt in Hawaii, unlike some other states. If you are unsure whether a specific item is exempt, the Hawaii Department of Taxation website lists detailed categories, or you can ask the retailer.
Comparing Hawaii's GET to sales tax in other states
Hawaii's general excise tax is structurally different from the sales tax used in most other states. A traditional sales tax is added at the point of sale and appears as a separate line on your receipt. Hawaii's GET is built into prices and collected from the business, not the customer at checkout.
The effective tax rate you pay in Hawaii on most purchases is around 4%, which is lower than the combined state and local sales tax in many mainland states. However, because GET is a gross receipts tax, some economists argue the true burden is higher due to tax cascading through the supply chain.
If you are moving to Hawaii from a state with sales tax, you may notice that displayed prices are closer to what you actually pay — there is no surprise tax added at the register. This can make budgeting simpler, though the GET is still embedded in the cost of goods and services.
GET rates by business type
| Business Type | General Excise Tax Rate |
|---|---|
| Wholesalers and certain agricultural sellers | 0.5% |
| Manufacturers and producers | 0.5% to 1.5% |
| Retailers and most service providers | 4% |
| Hotels, accommodations, and car rentals | 4.712% |
The rate you encounter as a consumer depends on where you shop. A grocery store operates under the retail rate of 4%, while a hotel or vacation rental charges 4.712%. If you purchase items from a manufacturer directly, the rate may be lower, though this is uncommon for individual consumers.
These rates are set by state law and do not vary by county or city. Hawaii has no local sales taxes or additional GET surcharges in specific areas.
How GET affects your shopping and travel costs
When you shop in Hawaii, the price displayed on the shelf or menu is typically the price you pay — GET is already included. This differs from mainland states where sales tax is added at checkout. For budgeting purposes, this means you can trust the displayed price without calculating additional tax.
If you are visiting Hawaii as a tourist, GET applies to hotel stays, car rentals, restaurant meals, and retail purchases just as it does for residents. The 4.712% rate on accommodations is one of the higher costs travelers encounter. Groceries and prescription medications remain exempt, so those purchases cost less than they might in high-sales-tax states.
For residents, the lack of a separate sales tax line can make it easier to track spending, since the total cost is visible upfront. However, the GET still affects your overall cost of living, particularly on services, dining, and accommodations.
Frequently Asked Questions
Do I pay sales tax on groceries in Hawaii?
No. Unprepared food for home consumption — including produce, meat, dairy, bread, and canned goods — is exempt from Hawaii's general excise tax. However, prepared foods, hot foods, and restaurant meals are subject to the 4% GET rate.
Is clothing taxed in Hawaii?
Yes. Unlike some states, Hawaii does not exempt clothing from the general excise tax. Apparel, shoes, and accessories are subject to the standard 4% GET rate and are included in the displayed price.
Why is my hotel bill higher than the room rate shown online?
Hotels in Hawaii charge 4.712% general excise tax, which is higher than the standard 4% retail rate. This tax is often added to the base room rate and may appear as a separate line on your final bill, though it is part of the total cost you owe.
Do I pay GET on prescription medications?
No. Prescription medications are exempt from Hawaii's general excise tax. Over-the-counter medications, vitamins, and supplements are not exempt and are subject to the standard 4% rate.
Is Hawaii's general excise tax the same everywhere in the state?
Yes. The GET rates are uniform statewide and do not vary by county or city. There are no local additions or surcharges. The rate depends only on the type of business and transaction, not on location within Hawaii.