Hawaii GE Tax – The 10 Most Frequently Asked Questions

Questions about Hawaii GE Tax (General Excise Tax)? Here are some quick answers to the most commonly asked questions.

If you received a letter saying that you owe Hawaii General Excise Tax or Transient Accommodations Tax, click here for help.

Warning: Every tax situation is different and you may need more forms that are presented here. This is an introductory guide only, and we recommend having your tax forms filed by a professional. Information presented on this page may be out-dated. Please read all Hawaii State-provided form instructions carefully.

Tax Services Oahu | Hawaii General Excise Tax Services

Hawaii GE Tax Question #1  – Do I Have to Pay GE Tax?

If you are asking, then the answer is probably yes.

Small business income, independent contractor income,  income from self employment, retail income, services income, commissions, rental payments received, and many more types of income are all are subject to the excise tax.

There are many (but somewhat rare) exemptions to Hawaii GE tax such as for financial institutions, alcohol fuels, ship building, refineries, insurance companies, contractors that clean up hazardous waste, etc.

If you think you have gross income might be exempt from Hawaii GE Tax, you can look at the Hawaii DOT website to view the exemption list.

Please note that these exemptions are somewhat uncommon, and if you qualify for an exemption, you are still required to file the GE Tax returns along with an additional schedule to claim the exemption.

Hawaii GE Tax Question #2 – How do I Get a GE Tax License?

You apply by filling out GE Tax Form BB-1. Make sure you seek out the most updated form, as Hawaii has revised the form recently, and there are some links leading to Hawaii Government Web Pages that are out of date.

As of 2017, the license costs $20.

You can also apply online by going to the Hawaii Business Registration Wizard.

For liability, legal and ethical reasons, we can’t help you or answer your questions about Form BB1. Please refer to the instructions. If you need help, you can hire us to review your situation, prepare, and file the form for you. Contact Us Here.

Hawaii GE Tax Question #3  – Can I Write Off My GE Taxes Paid on my Federal Taxes?

In most cases, for the most part, you can write off your GE Tax expenses. Please keep in mind that every situation is different and there are some exceptions.

Hawaii General Excise TaxHawaii General Excise Taxes can often be deducted on federal schedules E (for rental income) and C (for sole proprietorship income). If you have a multi-member partnership or corporation, GE Tax can often be written off on the appropriate income tax forms.

There is a little bit of a “trap” for calendar year taxpayers (most taxpayers and businesses file on the calendar year). In most cases, you have to be sure to take the deduction in the year that you actually “paid” your tax bill – not the year for which you “owed” the tax. Please consult with a tax professional for the proper way to take this write off.

Hawaii GE Tax Question #4  – How Often do I Have to Pay?

  • If you pay more than $4,000 total in Hawaii GE Tax during the year, you are required to file Form G-45 on  monthly basis.
  • If you pay less than $4,000 in GE Taxes during the year you file Form G-45 on a quarterly basis.
  • If you pay less than $2,000 in GE Taxes during the year you file form G-45 semi-annually.

When you sign up, you should pick a frequency appropriate to how much tax you plan to have to pay. If you select a filing schedule that is too infrequent, the Hawaii Department of Taxation will likely change your GE Tax account (and send you a letter to let you know that they did it).

Hawaii GE Tax Question #5  – I Didn’t Make a Profit – Do I Still Have to Pay?

Yes (sorry). Think of GE Tax as if it were a sales tax.

Hawaii General Excise Tax is based on “gross” income, not “net income”. This means that all rents received are subject to the tax – even if you operated your rental unit at a loss. The same goes for business.

Example:

If you had $50,000 in sales and $40,000 in expenses, you pay GE Tax on $50,000.

Note that this is generally not true for “income tax” – but “GE Tax” is totally separate and the tax is imposed differently.

Hawaii GE Tax Question #6  – How Much Can I Charge My Customers?

You are allowed to pass the tax on to your customers, but if you only add the tax rate amounts then you are not quite collecting enough tax to cover the taxes due. This is because the tax is calculated on the total amount you collect, including the extra for the tax. It’s a bit complicated.

The simple answer is that many businesses add 4.1666% to each sale on Maui, and 4.712% to each sale on Oahu and Kauai, and 4.4386% for sales on the big island to compensate.

Hawaii GE Tax Question #7  – What if I Haven’t Been Paying?

If you do not file and pay your GE Tax you can be subject to penalty and other unpleasant enforcement actions.  Hawaii GE TaxIf you have been renting property or running a small business and not paying the tax, it’s probably a good idea to fill out an application for a license, report your income, and pay GE Tax. There are many ways that Hawaii will find out that you are renting or in business and it is likely that at some point they will catch up with you.

Hawaii also has a tracking system that looks at what you filed on your income tax return. If you have years of self employment or rental income on your regular tax returns, it is very likely that you will get an examination letter from the State of Hawaii at some point.

Even if you can’t pay, the collections department will work with you on a payment plan. Though it is unpleasant to think that you might owe hundreds or thousands in back taxes, it’s generally not the end of the world and not worth losing too much sleep over. So we suggest that you file and face the inevitable.

Coming forward voluntarily gives you MUCH more negotiating leverage rather than waiting until they come after you. With the state facing heavy rail expenses and a depleted budget, this is an area that they have been going after vehemently and it is very likely that they will catch up to you.

Hawaii GE Tax Question #8  – Should I Hire Someone to prepare My GE Tax Returns?

In many cases, the forms are not that difficult to prepare, but we officially recommend having a tax professional prepare your GE Tax forms. If you wish to file yourself, instructions can be found here.

In the past, we used to tell clients, “It’s easy. If you are cost sensitive, just file the forms yourself and save on the fees”.  This honest policy didn’t work out for us. Many of these clients who filed by themselves made mistakes with the filings. In some cases this resulted in penalties, interest, and it created conditions to where several back-and-forth responses to the Hawaii Department of Taxation were needed to deal with the errors. Some of these were messy and took months to resolve. Clients blamed us for telling them “how easy it was” and demanded our time and help with these issues. This is why we no longer recommend that taxpayers prepare and file their own GE Tax forms.

Please understand that, for legal and several other reasons, we can not “teach” or “provide advice” of any kind for GE tax filing. If you wish to file yourself, please carefully read the Hawaii Department of Taxation’s General Excise Tax Instructions.

One thing to note is that preparation services are typically less than late fees, so if there is a chance that you might not meet your GE Tax Return obligations on time on your own, then you should certainly hire us (or another service provider) to file your forms on time for you.

If you are interested, you can find our Hawaii GE Tax services here.

Hawaii GE Tax Question #9  – What If I’m no Longer in Business?

If you are no longer collecting revenue subject to the tax you are supposed to cancel you active license status. This prevents you from having to file GE Tax Forms with nothing but zeros on them (this is technically required until you cancel).

To cancel your GE Tax license, fill out a Notification of Cancellation of Tax Licenses and Tax Permits. It is a very simple form to fill out. Go to this page and select the GEW-TA-RV-1 form.

Hawaii GE Tax Question #10  – Do I Need Form G-45 periodically AND Form G-49 at the End of Each Year too?

Yes. You have to fill out form G-49 in addition to any required form G-45. For example, if you pay semi-annually and you are a calendar year taxpayer, you fill out one Form G-45 for the first half of the year (due on July 20th, one Form G-45 for the second half of the year (due the following January 20th, and one G-49 return to reconcile the entire year (due 4 months after the end of the fiscal year.).

If you think you might want to hire us to help prepare your taxes, please contact us here.  Our email is taxservicesoahu@gmail.com and our phone number is 808-744-5314. Aloha.

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Please note that we can’t give tax advice in the comments section.

To help you with your GE Tax questions, we would have to go over and understanding the entire situation, setting up a client/accountant agreement, and disclosing our privacy policies.

The answer to many of these questions is “it depends” – and going over each situation takes time and work – for which we charge.

If you would like our help in this capacity, we will be honored to have you as a client. Please call us at 808 744 5314 to make an appointment.

Thank you very much for your understanding.

35 Replies to “Hawaii GE Tax – The 10 Most Frequently Asked Questions”

  1. I am trying to file tax using form g-45. Form asking for HAWAII TAX I.D. NO. GE number, how do I get the GE number? Can you help me. Thanks.

    1. Aloha Ms Hoang, thanks for the comment.

      If you do not have a GE Tax license, you can get one by filling out form BB1. You can do this by mail, online, or in person.

      The state presently charges $20 for a GE Tax License.

      If you would like to hire us to fill out this form and send it in for you, our current fee for this is $159 plus tax. Please call us at 808 744-5314 and we will be honored to help you.

    1. Aloha Lucy.

      The answer to this question is “it depends”, so we are not able to provide this advice via this comment section. Please feel free to call us at 808-744-5314 and we will do our best to guide you.

      Thanks!

  2. Let’s say I’m a barber and I currently have a GE Tax license but I am not barbering at the moment (no income) as I am pursuing other endeavors. Would it be best to cancel my GE Tax license and reopen it at a later time if I decide to continue barbering? Or should I maintain my GE Tax license and keep filing even though it’ll be all 0’s?

    1. Thanks for the comment – great question. There is no real definitive answer, but we can provide some guidance…

      The instructions say only this,

      “If your business activity has temporarily stopped, you may submit a written request to the Department to temporarily change the status of your license to inactive for up to 2 years. You must continue to file Form G-49 for each taxable year; however, it is not necessary to file Form G-45 while your license is inactive.”

      Unfortunately, that’s not real helpful as for deciding which is the technically correct way to continue.

      If you plan to stop for less than two years, you can consider this and file the G49s with zeros, or you can skip this and just file all of the returns with zeros. I wouldn’t cancel in that case.

      In my opinion, if you plan to stop for more than 2 years, or are not sure if you will ever be a barber again, then it probably makes sense just to cancel the license and just apply for a new one when the time comes. Note that it costs $20 to apply.

      It’s up to you, but if you don’t mind filing “zeros”, and you definitely plan on returning to barbering sometime in the reasonable future, then perhaps you can just keep it open – even if it is more than two years. Just don’t forget to file the returns with zeros!

      I hope this helps,

      Tod

  3. Will the new proposed federal tax law prevent me from writing off the GE tax as a business expense on my schedule C, or does it only have an effect on those individuals who deduct it on schedule A?

    1. Interesting comment, thank you.

      I’m not sure exactly, as I have not fully read the bill and they are still making adjustments to it, but it is my guess that the GE Tax deduction will still be available on Schedule C or E, as appropriate. I believe, though I admit again that I don’t know, that when we hear on the news about “the state income tax deduction will no longer be available”, they are talking specifically about INCOME taxes on Schedule A – which is a totally different animal than deducting Hawaii GE Taxes.

  4. I have a rental property in Oahu and want to pass GE tax to my renter. For $1000 rent, i will collect $1047.12. Here is my question: when I file G-45, what is my gross income per month? Is it $1045 ? Thank you for your help.

    1. I know this is frustrating but please understand that under no circumstance can we give specific tax advice via the comment section to non-clients without first going over and understanding your entire situation, setting up a client/accountant agreement, and disclosing our privacy policies.

      I’m sorry. It’s honestly not that we do not want to help you – we do – but the legal and liability ramifications are monumental. This is the case even for very simple questions.

      The answer to your question is “it depends” – and going over your entire situation takes time and work – for which we charge a retainer. This retainer is fully creditable toward any tax services for which you might eventually hire us – so ultimately it is free if you become a client.

      If you would like our help in this capacity, we will be honored to have you as a client. Please call to make an appointment at 808 744 5314.

      Thank you very much for your understanding.

    1. Most likely, yes (but not always). We don’t have enough info from your comment to tell you for sure. Receiving a 1099 usually means that you had income from self employment, contracting independently, or rental activity. However there are lots of other reasons for getting a 1099 that do not apply to GE Tax.

      Please check with your tax professional to be sure.

    1. It’s difficult to give this kind of tax advice in the comment section because we do not know your entire situation, but according to the instructions, you are supposed to check the box for the county in which you have conducted business.

    1. Great question!

      Disclaimer: Please do not hold us to the accuracy of this reply – this is a loaded question, and the answer might depend on many factors. To be sure, please consult with a tax professional or bookkeeper who is aware of your entire tax situation (or you can hire us 🙂 )

      With that said, it probably depends on how your business is taxed. For example, if the entity or individual is an accrual basis taxpayer, then you would apply the accrual method. If the entity or individual is a cash basis taxpayer, then it would report under the cash basis method.

      Thanks again.

  5. I am confused… I am filing for the first time this year. I am trying to file G-49 right now. I put in my total gross income for the whole year, right? The tax amount they said I owe came out to be the amount I already paid after filing my G-45 last quarter. Doesn’t make sense? So I am paying double taxes? Can somebody help? Thank you so much!

  6. Aloha I have a question:

    I have a business where I make and sell my jewelry at Ben Franklin Crafts. Its a locker program. They invoice me for the sales for the month, however the check that they write to me is dated for a month later. Do I file my GE based on the sales for that month of selling my jewelry or for when the check is written. For example, sold jewelry for the month of October, I received a check for October sales in November.

    Thank You,
    Kelley

    1. Aloha, thanks for the comment.

      Unfortunately we can’t give tax advice for this question to non-clients without first going over and understanding your entire situation, setting up a client/accountant agreement, and disclosing our privacy policies.

      The answer to your specific question is “it depends” – and going over your entire situation takes time and work – for which we charge a fee.

      If you would like our help in this capacity, we will be honored to have you as a client. Please call us at 808 744 5314 to make an appointment.

      Thank you very much for your understanding.

  7. Aloha

    I want to change my GE Tax business name. Can I do this and still keep the same/current ID #?

    Or do I have to make a new one and cancel the current one?

    If so how do I do this?

    Mahalo!
    Mark

    1. Aloha, thanks for the comment.

      Unfortunately we can’t give tax advice for this question to non-clients without first going over and understanding your entire situation, setting up a client/accountant agreement, and disclosing our privacy policies.

      The answer to your specific question is “it depends” – and going over your entire situation takes time and work – for which we charge a fee.

      If you would like our help in this capacity, we will be honored to have you as a client. Please call us at 808 744 5314 to make an appointment.

      Thank you very much for your understanding.

  8. Hello, my mother and I have a rental condo on Maui with split ownership between the two of us. We applied for a GET and TAT license under her name (she’s majority owner) and she has been paying the collected taxes from our guests. Should we both have business licenses and GET numbers as dual owners? On the GET filing it asks if you split your gross income with another licensed taxpayer – should we say yes or no since it is currently all under her name? It is my understanding at year end we will both have to pay income taxes for Hawaii for our respective shares of income but I’m confused on GET. Thank you.

    1. Aloha, thanks for the comment!

      Unfortunately we can’t give specific tax advice on how to file income or GE Taxes to non-clients without first going over and understanding your entire situation, setting up a client/accountant agreement, and disclosing our privacy policies.

      The answer to your specific questions are “it depends” – and going over your entire situation takes time and work. We charge $150 for a consultation – which would also include information on bookkeeping, income taxes, and estimated tax planning.

      If you would like our help in this capacity, we will be honored to have you as a client. Please call us at 808 744 5314 to make an appointment.

      Thank you very much for your understanding.

  9. Hi,
    We a reseller and only sale to the federal government or to other resellers with the federal government is the final end user. I know our sales are exempt that go directly to the federal government, but what about the sales that go thru an additional reseller?
    Hope this makes sense!
    Thank you!

    1. Aloha, thanks for the comment!

      Unfortunately we can’t give specific tax advice on how to file income or GE Taxes to non-clients without first going over and understanding your entire situation, setting up a client/accountant agreement, and disclosing our privacy policies.

      The answer to your specific questions are “it depends” – and going over your entire situation takes time and work. We charge $150 for a consultation – which would also include information on bookkeeping, income taxes, and estimated tax planning.

      If you would like our help in this capacity, we will be honored to have you as a client. Please call us at 808 744 5314 to make an appointment.

      Thank you very much for your understanding.

  10. If I provide an online editing service to a company physically located in Massachusetts, from whom I also receive payments, am I required to pay the GE tax? I have been paying Hawaii state tax only. Thank you.

    1. Aloha, thanks for the comment!

      Unfortunately we can’t give specific tax advice on how to file income or GE Taxes to non-clients without first going over and understanding your entire situation, setting up a client/accountant agreement, and disclosing our privacy policies.

      The answer to your specific questions are “it depends” – and going over your entire situation takes time and work. We charge $150 for a consultation – which would also include information on bookkeeping, income taxes, and estimated tax planning.

      If you would like our help in this capacity, we will be honored to have you as a client. Please call us at 808 744 5314 to make an appointment.

      Thank you very much for your understanding.

  11. In May, we raised the rent on a warehouse in which I am part owner. This raise will mean I pay $2,080/year.
    A. Even though the amount is only $80 greater than the $2,000 annual amount allowed for semi-annual payment, I suppose I’ll have to start filing quarterly??? True? Sigh…
    B. When do I have to make the change, because I won’t really be over the $2,000 until December.
    Thanks,

    1. Yup – sigh…

      The instructions are not very clear, unfortunately.

      They say…

      If you are filing quarterly or semiannually and your
      tax liability is more than the amounts listed,
      you must change your filing period.

      They do not really say “when” but it seems to imply that you must do it in the year that you exceed it.

  12. I was doing Lyft for 2 months in 2018 and stopped since because it wasnt being much of a profit. I was doing my taxes today and found out I needed to have a GE license to do Lyft. I’m not planning on doing Lyft again in the upcoming years. Do I still need to apply for a GE license even if I don’t do it anymore? I’m confused. I did send the money I owe the state of Hawaii for taxes but I’m not sure if I still have to apply for a GE license or not when I am not doing Lyft anymore.

  13. I want to keep my license but I don’t have any income to report and am filing zeros on my returns.
    How can I find out how many back years I need to file a return for?
    The online filing says I can’t file more than 5 years back. What if I have more than the past 5 years to file?
    I filed G-45 and indicated the filing period date of 12/31/__ for each year (only able to go back 5 years online) Is that sufficient, or was I supposed to file a G-49 for the whole calendar year?
    Thanks for your help!

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