Hawaii Business Taxes for LLCs
What business taxes does a Hawaii LLC need to pay? Learn about the General Excise Tax, state income tax, self-employment tax, and federal filing requirements for Hawaii LLCs.
Bizee Editorial Staff
Editorial Team
Hawaii LLC tax facts at a glance
Filing fee: $50
Processing time: 3–5 business days (standard)
State agency: Hawaii Department of Commerce and Consumer Affairs (DCCA)
Annual report due: Annually by the end of the quarter in which the LLC was formed
State tax rate: General Excise Tax: 4% (0.5% county surcharge in most counties); State income tax: 1.4%–11%
Hawaii LLC tax overview
Hawaii LLCs don't pay income tax at the entity level. Instead, profits pass through to members, who report them on personal returns and pay self-employment tax, state income tax, and federal income tax. Hawaii also has a General Excise Tax — a gross receipts tax that applies to most business activity in the state.
- No sales tax — Hawaii uses a General Excise Tax (GET) instead
- No franchise tax
- State income tax applies to LLC members on their share of profits
- Self-employment tax applies to members of pass-through LLCs
- Payroll tax applies if your LLC has employees
- Estimated tax payments are required in most cases
How Hawaii LLCs are taxed
Hawaii LLCs are pass-through entities by default, which means the business itself doesn't pay income tax. Profits flow to the members, who report them on their personal returns and pay tax at the individual level. The IRS classifies a single-member LLC as a sole proprietorship and a multi-member LLC as a partnership unless the LLC elects corporate tax treatment.
One thing that catches Hawaii business owners off guard: the General Excise Tax applies to gross receipts, not net profit. That means you owe GET even in years when your business doesn't turn a profit.
Hawaii General Excise Tax
The General Excise Tax (GET) is Hawaii's version of a sales tax — but it works differently. It's a tax on the privilege of doing business in Hawaii, applied to gross receipts from most business activities. The standard GET rate is 4%, with a 0.5% county surcharge in Honolulu, Hawaii, Kauai, and Maui counties, bringing the effective rate to 4.5% in those areas.
To collect and remit GET, you need to register with the Hawaii Department of Taxation and get a General Excise Tax license. You file GET returns on Form G-45 (periodic) and Form G-49 (annual reconciliation). Filing frequency — monthly, quarterly, or semiannually — depends on your annual GET liability.
Hawaii state income tax
Hawaii has a state income tax with rates ranging from 1.4% to 11%, depending on income level. LLC members pay state income tax on their share of the LLC's profits. Hawaii's top marginal rate of 11% is one of the highest in the country, so the state income tax bill can be significant for higher-earning members.
If your LLC elects to be taxed as a C Corporation, it pays Hawaii's corporate income tax instead. The Hawaii corporate income tax applies to every domestic or foreign corporation doing business in the state, with rates ranging from 4.4% to 6.4% on taxable income.
Federal taxes for Hawaii LLCs
LLC members pay federal income tax on their share of the LLC's net income. Single-member LLC owners report income on Schedule C with Form 1040. Multi-member LLC members report their share on Schedule E. On top of income tax, members also owe self-employment tax — currently 15.3% on net earnings up to the Social Security wage base, and 2.9% on earnings above it.
Federal taxes can get complicated depending on your LLC's structure and elections. A tax professional can help you figure out whether an S Corporation election under Form 2553 or a corporate election under Form 8832 makes sense for your situation.
Payroll taxes
If your Hawaii LLC has employees, you're responsible for withholding and remitting payroll taxes. That includes federal income tax withholding, Social Security and Medicare (FICA) taxes, and Hawaii state income tax withholding. You'll also need to pay the employer's share of FICA — 7.65% on each employee's wages.
To handle payroll, your LLC needs an Employer Identification Number (EIN) from the IRS. You can apply for an EIN at no cost through the IRS website. Hawaii also requires employers to register with the Hawaii Department of Taxation for state withholding purposes.
FAQ
No. Hawaii doesn't have a traditional sales tax. Instead, it has the General Excise Tax (GET), which is a tax on gross receipts from business activity. The standard GET rate is 4%, with a 0.5% county surcharge in most counties. Unlike a sales tax, GET applies to the business — not the customer — though many businesses pass the cost along.
Most business entities doing business in Hawaii are subject to state tax. LLCs taxed as pass-through entities — sole proprietorships or partnerships — pass income to members, who pay Hawaii state income tax on their share. LLCs that elect corporate tax treatment pay Hawaii's corporate income tax. All entities engaged in business activity in Hawaii are generally subject to the General Excise Tax.
Hawaii doesn't have a separate self-employment tax — that's a federal obligation. LLC members in Hawaii pay the federal self-employment tax (15.3% on net earnings up to the Social Security wage base, 2.9% above it) on their share of LLC profits. They also pay Hawaii state income tax on those same profits at rates from 1.4% to 11%.
The Hawaii corporate income tax applies to every domestic or foreign corporation — including LLCs that elect to be taxed as a C Corporation — doing business in the state. Rates range from 4.4% on the first $25,000 of taxable income to 6.4% on income above $100,000. Pass-through LLCs don't pay this tax at the entity level.
Yes. Hawaii has a state income tax with rates from 1.4% to 11%. LLC members pay Hawaii state income tax on their share of the LLC's profits. Hawaii's top rate of 11% is among the highest in the country, so higher-earning members can face a significant state tax bill on top of federal obligations.
No. Hawaii doesn't have a franchise tax. Unlike states such as California or Texas, Hawaii doesn't charge LLCs an annual franchise or privilege tax based on income or net worth. Your main ongoing state tax obligations are the General Excise Tax on gross receipts and state income tax on profits.
Yes. In most cases, LLC members need to pay estimated taxes to both the IRS and the Hawaii Department of Taxation throughout the year. Federal estimated taxes are due quarterly — typically in April, June, September, and January. If you expect to owe $1,000 or more in federal tax for the year, you're generally required to make estimated payments. A tax professional can help you figure out the right amounts.
It depends on the tax type. The General Excise Tax rate is 4% statewide, with a 0.5% county surcharge in most counties. Hawaii state income tax for individuals — including LLC members on pass-through income — runs from 1.4% to 11%. The Hawaii corporate income tax rate ranges from 4.4% to 6.4% for LLCs taxed as corporations.
