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Hawaii’s Revised GET Tax Rates By County & new TAT requirement 2019

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— If you own Hawaii properties and collect rental income, then you need to know the recent changes to the GET tax rate that apply to rental income.

Up until January 1, 2019, Honolulu County (the island of Oahu) was the only county with a 0.5% surcharge above the 4% GET rate. Back in 2007, the surcharge was justified as a temporary measure for the construction of Oahu’s new rail.

It appears some of the neighbor island counties also need extra revenue and decided to add their own surcharge effective 1.1.2019.

Watch what will happen to the temporary rate increases at the time they are scheduled to expire.

Hawaii rental income is subject to three tax obligations:

1) GET – All gross rental revenue (before expenses) from Hawaii properties is subject to Hawaii’s General Excise Tax (GET). The actual GET rate differs by county.

You may collect the GET from your tenant and pay it to the tax office. If you do, then the GET you collect increases your gross rental revenue and also becomes taxable at the same rate.

However, you may also collect the additional GET on top of the GET from your tenant. The total represents the maximum pass-on rate you are allowed to collect from your tenant.

Example of the GET maximum pass-on rate for Honolulu County:

  • $1,000 gross rent received  –> pay $45.00 GET (4.5% rate) = net rent $955.
  • $1,000 rent plus collect $47.12 GET (4.712% max pass-on rate) = $1,047.12 gross rent received –> pay $47.12 GET (4.5% of gross rent) = net rent $1,000.

The table below shows the actual GET tax rate by county and the GET maximum pass-on rate that you are allowed to collect from your tenant to pay to the tax office:

Hawaii's GET rates by County
Hawaii’s GET rates by County

2) TAT – In addition, all rental revenue from rental terms shorter than 180 days is subject to Hawaii’s 10.25% Transient Accommodation Tax (TAT)

GET and TAT filing requirements come with stiff penalties. There is no statute of limitations for audits. We strongly recommend to always file and pay your GET and TAT diligently.

See related article: GET & TAT in Hawaii – The Easiest Way to File & Pay

3) State Income Tax – You will also need to file a Hawaii State Income Tax Return, typically form N-11 or N-15, depending on if you are a Hawaii resident or part-year/nonresident.

Typically you would first file your federal tax return and then transfer the relevant figures onto your Hawaii tax return.

Going into more details is beyond the scope of this summary. We recommend you always consult with your favorite qualified tax professional. 

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Owning real estate also requires paying the appropriate property taxes and following local rental restrictions.

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Additional new TAT requirement:

A new law took effect on July 1, 2019, requiring hotels, resorts, and other short-term rental operators to pay TAT on any mandatory extra charges that the guest is required to pay as part of their short-term rental booking. Mandatory extra charges might include a resort fee, and also the cleaning fee if it is collected as part of the rental booking.

Those fees are to be included in the gross rental proceeds. Check the details here: SB380 SD1

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Let us know your thoughts. We love to hear from you. Reciprocate Aloha: ‘Share’, ‘Like’ and ‘Comment’ below.  ~ Mahalo & Aloha

Hawaii’s Revised GET Tax Rates By County & new TAT requirement 2019 was last modified: September 11th, 2021 by George Krischke
George Krischke
Principal Broker (R) Hawaii Living See my other articles

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10 Responses to "Hawaii’s Revised GET Tax Rates By County & new TAT requirement 2019"

  • Mike Griffin
    October 18, 2021 - 11:59 am Reply

    I have recently bought two vacation (short-term) rentals at Kailua-Kona, and have a manager for them. I do not have a tax-advisor (yet) in Hawaii so am trying to come to grips with the taxes for my rentals. It looks like I can legally pass the 4.5% GET and 10.25% TAT taxes on to the guests, as well as the 10.25% tax on the cleaning fee (etc.), right? So, if my guest stays 6 nights at $300 per night, they would be billed $1800 plus (4.5% GET of 1800=$81); plus (10.25% TAT=$184.5 ); plus 10.25 % of 150 cleaning fee=$15.40; plus the $150 cleaning fee; for a total of $2230.88. In other words I get $1800 (less my manager’s commission) and the State gets $430.88 plus my income tax. Is this the right arithmetic?

    • Mike Griffin
      October 18, 2021 - 12:14 pm Reply

      I just caught the error that I included the $150 cleaning fee with the amount due to the State, So the State would actually receive $280.88.

      • George Krischke, Principal Broker, Hawaii Living LLC
        October 21, 2021 - 3:30 pm Reply

        Aloha Mike Griffin!
        Almost correct. The total GET & TAT due is $291.76.
        Review the calculation in my response to your initial question. Also, check our article https://www.hawaiiliving.com/blog/get-tat-hawaii-easiest-way-file-pay/
        — Btw, hold on to your hats: Each island/county is working on increasing their respective TAT rate by up to an additional whopping 3% above the current 10.25%! Eventually, only the better-off visitors will be able to afford vacations in Hawaii.
        Good luck. ~ Mahalo & Aloha

    • George Krischke, Principal Broker, Hawaii Living LLC
      October 21, 2021 - 3:20 pm Reply

      Aloha Mike Griffin!
      Great question. Here is the correct calculation:
      If you collect the GET & TAT separately from your guest, given your $1,800 room stay plus $150 cleaning fee example, then you may collect from the guest as follows:
      $1,950 – room stay plus cleaning
      $91.88 – GET 4.712% (pass-on rate, based on $1,950)
      $199.88 – TAT 10.25% (based on $1,950)
      Notice that the collected TAT is exempt from GET, but only if you collecte the TAT separately as a ‘visible pass-through tax.’
      If you do not collect the GET & TAT separately from your guest, then the entire lump sum amount collected is subject to both GET & TAT.
      –Don’t just take our word for it. Check the TAT brochure:
      http://files.hawaii.gov/tax/legal/brochures/tat_brochure.pdf:
      “The TAT that is visibly passed on to the guest or tenant is exempt from the GET. However, the GET that is visibly passed on is included in taxable income subject to the GET. If you charge your guest or tenant a flat fee without separately stating the GET and the TAT, you are required to pay GET (including a 0.5% county surcharge if applicable)
      and TAT on the entire amount.”
      In doubt always check with your favorite qualified tax professional.
      Call us when you are ready to buy or sell real estate.
      Good luck. ~ Mahalo & Aloha

  • Jess Dickie
    June 15, 2021 - 3:06 am Reply

    How do you get these licenses? Is there an application link? Thank you

    • Mike Griffin
      October 18, 2021 - 12:09 pm Reply

      The application fee is $500 (which, (if the STVR-permit is actually issued by the State), is good for 5 years, (I think).

      • George Krischke, Principal Broker, Hawaii Living LLC
        October 21, 2021 - 4:23 pm Reply

        Aloha Mike Griffin!
        I believe Jess Dickie was asking about how to get a GET & TAT license, ..see my reply to Jess.
        ‘STVR-permits’ are an entirely different animal. Those vary by island/county.
        Oahu’s short-term vacation rules and updates are here:
        https://www.hawaiiliving.com/blog/category/condotels-short-term-rentals/
        ~ Mahalo & Aloha

    • George Krischke, Principal Broker, Hawaii Living LLC
      October 21, 2021 - 4:07 pm Reply

      Aloha Jesse Dickie!
      The nominal one-time application fee for a GET and a TAT license is $20. GET & TAT licenses do not expire. You may apply for a new GET license, or add a TAT license to your existing GET license here: https://hitax.hawaii.gov/_/ –> Register New Business License –> BB-1 Business Application.
      Good luck.
      ~ Mahalo & Aloha

  • Marina Yamamoto
    October 10, 2019 - 10:10 pm Reply

    The cleaning fee too?! ROBBERY

    • George Krischke, Principal Broker, Hawaii Living LLC
      October 15, 2019 - 1:10 am Reply

      Aloha Marina Yamamoto!
      Thank you for checking in and commenting. Let us know if there is anything else we can do for you.
      ~ Mahalo & Aloha