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Does Hawaii charge sales tax on services?

by Sarah Craig May 3, 2026

The majority of US states require merchants to charge sales tax on tangible personal property (TPP), otherwise known as physical goods. Many states also implement sales and use tax on digital goods and SaaS. Since the economy has shifted over time from a manufacturing economy to a service economy, states are now looking to generate revenue by taxing services.

For service providers in Hawaii, there are a few important things to know. Firstly, Hawaii doesn’t have what we think of as traditional US sales tax. They have a general excise tax (GET). Learn how GET works and what makes selling services in Hawaii unique from other states.

What service providers need to know about general excise tax

Rather than a tax on a sale paid by the buyer, GET is a tax for “the privilege of doing business” in the state of Hawaii and levied on the seller. GET is levied on the gross income of all types of business activity, unless specifically exempted by law. Sales taxes, on the other hand, are typically levied only on sales of tangible personal property and only at the retail level.

According to the Hawaii Department of Taxation, “Activities subject to GET include wholesaling, retailing, farming, services, construction contracting, rental of personal or real property, business interest income, and royalties.”

In Hawaii, a seller is responsible for remitting GET whether or not they actually collect GET on a transaction. However, sellers are allowed to pass GET on to customers, and that’s why, if you make a purchase in Hawaii, you’ll likely see a small percentage of the sale tacked on to your receipt to cover GET.

Last but not least, while sales tax is due on retail sales of tangible personal property, GET is due on all business transactions, even if you are selling to another business (a transaction that would generally not be taxable in other US states with a sales and use tax.) 

With all that in mind, GET is treated similarly to sales tax in Hawaii, and a lot of the same sales tax rules apply.

Does Hawaii charge sales tax on services?

Services are generally taxable, but, remember, Hawaii charges a tax for doing business in the state – GET. Hawaii’s taxation works differently and isn’t a standard “sales tax.” In general, the following services need to pay GET (and register for a general excise tax permit) as part of doing business in the Aloha State: 

• Manufacturing
• Producing
• Providing wholesale services
• Selling retail goods and services
• Renting, leasing real property
• Construction contracting

Businesses providing tangible goods or services pay a different rate for GET than wholesalers. The State of Hawaii Department of Taxation provides GET rates for all businesses; it’s important to understand the tax rate you must pay. 

Please keep in mind that this is a guideline, and you should consult with a sales tax professional to determine if the services your business provides should be subject to state sales tax. For an in-depth look at Hawaii sales tax, review TaxJar’s guide to sales tax in Hawaii and the Hawaii Department of Taxation for more details.

How to stay compliant with sales tax when you sell services

General excise tax management does not need to be challenging. If you need to apply for a permit, file a GET return, and remit payment, use TaxJar to simplify the process and remain compliant. To learn more about TaxJar and get started automating your sales tax compliance, start a free, 30-day trial today.

General Excise Tax FAQ

General excise tax works differently than the standard sales tax. Use the FAQ to help demystify your GET responsibility in the state of Hawaii.

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