Hawaii General Excise Tax Guide for Online Sellers

Prepared by Sales Tax Helper

Table of Contents

1. Introduction
2. Nexus Considerations
3. General Rules and Compliance Considerations
4. Registration, Collection, and Sourcing Rules
5. Collection, Rates, and Remittance
6. Pitfalls and Risks
7. International Sellers
8. Audit Considerations
9. Voluntary Disclosure Agreements (VDAs)
10. Conclusion
11. References & Resources

1. Introduction

Purpose of This Guide

This comprehensive guide is designed specifically for online sellers conducting business in
Hawaii. Whether you're an Amazon seller, direct-to-consumer brand, marketplace seller,
international shipper, or e-commerce retailer, understanding Hawaii's General Excise Tax (GET) obligations is critical for your business success and compliance.

Hawaii's tax landscape differs significantly from traditional sales tax states, using a General
Excise Tax instead of sales tax. The economic nexus thresholds implemented after the 2018
Wayfair decision create new responsibilities for online sellers. The state has specific
requirements for remote sellers that can trigger substantial compliance obligations, including
registration and collection duties based on economic activity alone.

This guide will help you navigate Hawaii's unique GET requirements, understand when you
must register and collect tax, avoid common compliance pitfalls, and protect your business from costly penalties and audit exposure. These rules apply to all online sales channels, from major marketplaces like Amazon and eBay to your own e-commerce website.

Why This Matters

Hawaii's General Excise Tax system presents unique challenges for online sellers, with
significant financial and operational stakes. Unlike traditional sales tax, GET is a tax on the business for the privilege of doing business in Hawaii, not on the customer, though businesses typically pass this cost to customers. Criminal penalties are possible for failure to collect and remit GET, as collected GET belongs to the state, not your business.

Severe financial exposure can result from penalties reaching 25% of tax due, plus interest and
collection costs. Business disruption through tax liens, asset seizure, and business closure are real consequences of non-compliance. Personal liability means business owners and officers can be held personally responsible for unpaid GET.

Common risks for online sellers include:

• Inventory nexus through fulfillment centers (like Amazon FBA)
• Marketplace confusion about collection responsibilities
• Underestimating economic nexus thresholds
• Failing to register after crossing $100,000 in sales and 200 transactions
• Mixing marketplace and direct sales without proper tax management

The good news is that with proper understanding and compliance systems, you can protect your business while taking advantage of Hawaii's market opportunity. This guide provides the
roadmap to get you there, and the following sections will walk you through every aspect of
Hawaii GET for online sellers, with practical examples and direct links to official state resources.

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