What is the Hawaii General Excise Tax?
The Hawaii General Excise Tax (GET) is a value-added tax (VAT) imposed on the sale of goods and services in the state of Hawaii. It is a tax that is levied at each stage of the supply chain, meaning that it is applied to the selling price of goods and services throughout the entire process, from production to consumption. The GET is one of the primary sources of revenue for the state of Hawaii and is used to fund various government services and programs. In this article, we will delve into the details of the Hawaii General Excise Tax, including its rate, how it is calculated, and its impact on businesses and consumers in Hawaii.
The GET rate in Hawaii is currently set at 4.016%, which is one of the highest rates in the United States. This rate includes both the state’s general excise tax and the county surcharge. The state’s general excise tax rate is 4.0%, while the county surcharge ranges from 0.416% to 0.5% depending on the county in which the transaction occurs. This means that the total GET rate can vary depending on the location of the transaction.
Calculating the GET is relatively straightforward. It is based on the selling price of the goods or services, and the tax is calculated by multiplying the selling price by the applicable GET rate. For example, if a business sells a product for $100, the GET on that sale would be $4.016 (100 x 4.016%). It is important to note that the GET is a final tax, meaning that it is paid by the consumer and is not recoverable by the business.
The Hawaii General Excise Tax has a significant impact on businesses and consumers in the state. For businesses, the GET is a major cost that must be factored into the pricing of goods and services. This can make it more expensive for businesses to operate in Hawaii, especially when compared to other states with lower tax rates. However, the GET also provides a stable source of revenue for the state, which can be used to fund public services and infrastructure projects.
For consumers, the GET can lead to higher prices for goods and services. This can be particularly noticeable for businesses that are not able to pass on the full cost of the GET to their customers, such as small businesses or service providers. As a result, consumers may see an increase in the cost of living in Hawaii, which can make it more difficult for them to afford basic necessities.
Despite the challenges posed by the Hawaii General Excise Tax, it remains an important part of the state’s tax system. The GET has been in place since 1949 and has played a crucial role in funding government services and programs over the years. While there have been calls for a reduction in the GET rate, any changes to the tax would require careful consideration of the potential impact on state revenue and public services.
In conclusion, the Hawaii General Excise Tax is a value-added tax that is imposed on the sale of goods and services in the state of Hawaii. With a current rate of 4.016%, the GET has a significant impact on businesses and consumers in the state. While it presents challenges for businesses and consumers alike, the GET remains an important source of revenue for the state of Hawaii and continues to fund vital public services and programs.
