SALES & USE TAX EXEMPTIONS    
     
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Hawaii - Sales and Use Tax Exemptions and Exemption Certificates

Hawaii does not impose a sales tax. In lieu of the sales tax, The General Excise Tax is levied against persons engaging in business within the state. The general excise tax is levied upon manufacturers, businesses selling tangible personal property at both wholesale and retail, contractors, theaters, amusements, radio broadcasting stations, sales representatives, service business, insurance solicitors and agents and more. The general excise tax rate varies depending on the business activity; 0.15% on insurance solicitors, 0.5% on certain activities like wholesaling, selected intermediary services, manufacturing, producing; 4% on most activities at the consumer level like retail sale of goods, sale of services, contracting, commissions, rent, interest, and other activities. (Hawaii. Revised. Stat. § 237-13, Tax Facts 96-1)

HAWAII EXEMPTIONS: General excise tax shall not be imposed on the following:

Hawaii Exempt Persons: Certain public service companies; public utilities owned and operated by the State or any county or other political subdivision thereof; certain fraternal benefit societies or associations; Corporations, associations, trusts, or societies organized and operated exclusively for religious, charitable, scientific, or educational purposes; certain senior citizens housing facilities, certain Business leagues, chambers of commerce, boards of trade, civic leagues, agricultural and horticultural organizations, and organizations operated exclusively for the benefit of the community; hospitals, infirmaries, and sanitaria; certain cooperative associations; persons affected with Hansen's disease and kokuas, with respect to business within the county of Kalawao; certain nonprofit shippers associations. (Hawaii. Revised. Stat.§ 237-23)
Hawaii Exempt Transaction: Amounts attributable to services furnished by one related entity to another related entity or to imputed or stated interest attributable to loans, advances, or use of capital between related entities.(Hawaii. Revised. Stat.§ 237-23.5)
Amount not taxable: Certain amount received by the business are not taxable. Refer Hawaii Revised. Stat. §§ 237-24, 237-24.3, 237-24.5, 237-24.7)
Certain business related transactions are exempt.

  • Financial Institutions. Hawaii. Revised. Stat. § 237-24.8
  • Sales to Federal Government. Hawaii. Revised. Stat. §237-25
  • Scientific contracts with the United States. Hawaii. Revised. Stat.§ 237-26
  • Petroleum refiners. Hawaii. Revised. Stat. §237-27
  • Alcohol fuels. Hawaii. Revised. Stat. §237-27.1
  • Air pollution control facility.Hawaii. Revised. Stat. §237-27.5
  • Solid waste processing, disposal, and electric generating facility; certain amounts exempt. Hawaii. Revised. Stat. §237-27.6
  • Shipbuilding and ship repair business. Hawaii. Revised. Stat. §237-28.1
  • Producers of motion picture or television films. HHawaii. Revised. Stat. §237-28.2
  • Certified or approved housing projects. Hawaii. Revised. Stat. § 237-29
  • Sales of tangible personal property shipped out of the State. Hawaii. Revised. Stat. § 237-29.5
  • Certain computer services. Hawaii. Revised. Stat. §237-29.6
  • Insurance companies. Hawaii. Revised. Stat. §237-29.7

CAUTION : Sales tax exemptions mentioned above are very briefly described. Please see the exemption statute and the applicable regulations for details. Transactions that do not meet the requirements of the exemption statute and its applicable regulations do not qualify for the sales tax exemptions.

HAWAII EXEMPTION CERTIFICATES:

Hawaii Resale Exemption: The department may require a seller take from the purchaser of tangible personal property a certificate, in a form prescribed by the department, certifying that the sale is a sale at wholesale. A purchaser who gives a resale certificate to a seller is obligated to pay the seller, upon demand, "the amount of additional tax which by reason thereof is imposed upon the seller.(Hawaii. Revised. Stat.§ 237-13(2)(F), (4)(B), (6)(B); TIR 94-6)

Hawaii Tax Exempt Entities: Organizations specifically exempt pursuant Hawaii. Revised. Stat. § 237-23(a)(3) through (6) must apply for exemption with the Hawaii Department of Taxation.

Hawaii Other Exemptions:

HAWAII EXEMPTION CERTIFICATE VERIFICATION: Tax Licenses

 
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