Important Tax Facts:
-The State of Hawaii has both Corporate income tax and personal income tax rates with maximum rates of 11.00% and 6.40%, respectively. Hawaii is also one of the few states that also has an estate tax. Read more below.
The state of Hawaii does have an individual income tax. Like most states with income tax, it is calculated on a marginal scale, eleven (11) tax brackets. They range from 1.40% to 11.00%. The highest bracket of 11.00% starts for income greater than $200,000.
The state of Hawaii has a Corporate Tax rate which is also calculated on a marginal scale. The Corporate Tax is only assessed on C Corporation (other flow-thru entities, such as S-Corps, LLCs and LLPs are not subject to the Corporate Tax). The Corporate Income tax ranges from 4.40% to 6.40% and the highest bracket starts at $100,000.
Like many states, Hawaii has multiple Sales tax rates. One at the state level and another at the local level. The state rate is 4.00% and the average local rate is 0.44% (total average rate for Hawaii Sales Tax is 4.44%) which is a low sales tax compared to most of the country.
Sales tax bases define what is taxable and nontaxable. Most states apply the sales taxes to only final retail sales. However, Hawaii’s sales tax has a broad tax base that additionally includes many business-to-business services. (Similar to New Mexico, North Dakota, and South Dakota).
The average property tax rate for residential property in the state of Hawaii is 0.30%, making it the lowest state in the union as far as Property Tax as a Percent of a taxpayer’s primary residence.
The state of Hawaii does have an estate tax that ranges from 10% to 20% depending on the size of the estate. The first $5,490,000 Million dollars of the estate is exempt from tax.
Payroll (Unemployment Insurance) taxes are paid by business on the behalf of their employees to fund unemployment insurance. It consists of multiple factors, such as taxable wage base and UI tax rate. Below is an outline of important factors regarding State Payroll Taxes in Hawaii –
Hawaii is one of the less expensive states in regards to opening an LLC. Here are some important facts: