What is GE Tax?

Abigail Walton
Oct 7
5 min read

Updated: Oct 8

A Simple Guide for Hawai‘i Small Business Owners 🌺

Running a small business in Hawai‘i comes with unique financial responsibilities. One of the most important (and often misunderstood) obligations is the General Excise Tax (often called GET or GE Tax).

Unlike many states that impose a sales tax, Hawai‘i has a different system: the GET is a tax on business activity itself. Understanding what GE Tax is, how it works, and how to stay compliant will save you stress, time, and potentially costly mistakes. Maui Books is here to help.

In this post, we’ll break down GE Tax in plain language and offer guidance for small

business owners who want peace of mind when it comes to bookkeeping.

What is Hawai‘i GE Tax?

The General Excise Tax is a tax on gross income from almost all business activities in Hawai‘i. Instead of being added at the cash register like a sales tax, GET applies to the total amount of money your business earns.

That means GE Tax is calculated on your gross receipts (the full amount before deducting expenses). For example, if your business earns $100,000 in revenue in a year, GET is applied to that full amount, not just your profit.

💡Key Point: GE Tax is technically a tax on the business, not the customer. However, many businesses choose to pass this cost on to their customers by adding GET to their invoices or receipts.

Who Needs to Pay GE Tax?

If you operate a business in Hawai‘i, chances are you need to pay GET. This applies whether you:

Run a vacation rental or manage short-term accommodations
Own a small retail shop, restaurant, or café
Provide professional services (consulting, design, bookkeeping, etc.)
Earn commissions, royalties, or rental income
Do contracting or construction work

💡 Confused? Essentially, if you earn income in Hawai‘i from providing goods or services, GET applies.

GE Tax Rates

The GE Tax rate varies depending on the type of business activity:

4% Standard Rate – This applies to most goods and services statewide.
0.5% County Surcharge Rate – Does not apply to activities taxed at the 0.5% or 0.15% rate (wholesale transactions, manufacturing, and insurance commissions)
0.5% Rate – Applied to wholesale transactions and manufacturing.
0.15% Rate – Certain insurance commissions.

⚡Most small businesses will fall under the standard 4.5% rate.

Why do I pay a different rate than I charge?

In Hawaiʻi, the General Excise (GE) Tax is a business activity tax, but businesses are allowed to pass this cost on to customers. To do this, we apply a slightly higher rate so that the amount we remit to the state does not come out of pocket. This is considered a “pass-through” charge, meaning we are permitted to include the GE tax in the total price charged to customers.

Let's Break It Down:

1️⃣ You sell an item for $100 – This is the amount that you want to keep for your income.

2️⃣ You add 4.712% GE tax to the customer – $100 x 1.04712 = $104.71

3️⃣ The state requires 4.5% of your gross receipts – $104.71 x 0.045 = $4.71

4️⃣ What's left for you? – $104.71 = $4.71 = $100.00

You charge 4.712%, you pay 4.5%, and you still keep your $100.

How to Register for GE Tax

Before collecting or paying GET, you must register with the State of Hawai‘i:

Fill out Form BB-1 (Hawai‘i Basic Business Application).
Pay the one-time registration fee ($20).
Receive your Hawai‘i Tax ID number and GE license, which must be displayed at your place of business.

Once you’re registered, you’ll file returns and make payments on a regular schedule.

Filing GE Tax

Businesses must file GET returns either:

Monthly (if you owe more than $4,000 in GET per year)
Quarterly (if you owe between $2,000–$4,000 in GET per year)
Semi-annually (if you owe less than $2,000 in GET per year)

There is also an annual reconciliation return, which summarizes your total income and ensures everything is reported correctly.

Forms you’ll need:

G-45 – Periodic GET return
G-49 – Annual reconciliation return

💡Key Point: Filing can be done online through Hawai‘i Tax Online or by mail.

Why GE Tax Matters for Small Business Owners

Here’s why understanding GET is so important:

It affects your pricing. Because GET applies to your gross receipts, not your profit, it can add up quickly. Many businesses pass the tax on to customers, but you need to account for it in your pricing strategy.
It impacts your cash flow. Even if your business has a “slow month,” GET is still owed on the income earned. Careful bookkeeping ensures you set aside funds to cover it.
Penalties are steep. Missing deadlines or underreporting income can result in interest, penalties, and unnecessary stress.
It ties into other taxes. For example, if you operate a vacation rental, you’ll also need to file Transient Accommodations Tax (TAT) in addition to GET.

Common Mistakes to Avoid

1️⃣ Forgetting to register – You must have a GE license before operating legally.

2️⃣ Not filing zero-income returns – Even if you made no income during a period, you still must file.

3️⃣ Mixing personal and business expenses – This makes recordkeeping difficult and increases your audit risk.

4️⃣ Underestimating cash flow needs – Failing to set aside GET can leave you scrambling when payments are due.

What’s Changing?

⚡Senate Bill 1035 (SD2 HD1 CD1) has passed and is effective in January of 2026. It exempts certain medical goods or services from GET if they are reimbursed through Medicare, Medicaid, or TRICARE. ⚡

While not GET itself, there are changes to related taxes (Transient Accommodations Tax or TAT) and lodging/tourism “green fees” effective 2026 that may impact businesses, especially vacation rentals or hotels, which often deal with both GET and TAT.

STAY AWARE:

If you’re a medical provider receiving reimbursements from Medicare, Medicaid, or TRICARE, check whether your services are covered under SB 1035 so you can plan for the exemption.
Keep tabs on whether the extension past December 2030 becomes law. That affects your cost of doing business.
Stay aware of how related tax laws (TAT, lodging tax, etc.) change, since for businesses in tourism or short-term rentals, changes there often interact with GET in your accounting and pricing.
Always confirm with official Hawaiʻi Department of Taxation sources or tax professionals, because legislative proposals can change before becoming law.

How Maui Books Helps With GET

Proper bookkeeping makes GE Tax much less stressful. With organized, accurate records, you’ll always know:

How much income you’ve earned (and therefore how much GET you owe)
Which expenses may qualify for exemptions or deductions
When payments and filings are due

⚡At Maui Books, we specialize in helping small businesses and vacation rental owners stay compliant with Hawai‘i’s unique tax requirements. From GET and TAT filings to payroll and financial reporting, our goal is to give you peace of mind while you focus on your business. ⚡

🌺Contact us here to get your GE Tax in order

Final Thoughts

Hawai‘i’s GE Tax may seem complicated, but with the right support, it doesn’t have to be stressful. By understanding how GET works and staying on top of your filings, you’ll avoid penalties and keep your business on the path to growth.

If you’re a small business owner looking for Maui GE Tax help, reach out to Maui Books. We’ll handle the details so you can stay compliant, stress-free, and focused on what matters most.