Hawaii Income Tax Calculator

Taxes in Hawaii

Hawaii State Tax Quick Facts

• Income tax: 1.40% - 11.00%
• Sales tax: 4% - 4.5%
• Property tax: 0.29% effective rate
• Gas tax: 16 cents per gallon of regular gasoline and diesel

Although Hawaii's top income tax rate of 11% is quite high on a national scale, property taxes average just 0.29% of property values annually. That's the lowest effective property tax rate in the U.S. While Hawaii doesn’t technically have a state sales tax, there is a general excise tax that businesses pay on all business activities. This tax is usually passed on to consumers. The excise tax is 4%, with some areas charging an additional 0.5%.

A financial advisor can help you understand how taxes fit into your overall financial goals. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.

Hawaii Income Taxes

If you’re thinking about a move to the Aloha State, you’ll want to know how the state’s tax system affects your finances. The most significant tax in the state is the personal income tax. Income earners living on the Hawaiian Islands pay tax rates between 1.40% and 11%, depending on their income level.

The rates above apply to Hawaii taxable income, which is based on Hawaii adjusted gross income (AGI). This is similar to the federal AGI that appears on your IRS form 1040, with some key differences. Several types of income that are taxable federally are not taxable in Hawaii and must be subtracted to calculate Hawaii AGI. Many types of pensions are exempt, as are all Social Security benefits.

Payments made to an individual housing account (intended for a down payment on a first home) can also be subtracted up to $5,000 (single filers) and $10,000 (joint filers) per year and $25,000 total. Other subtractions include interest from federal obligations (like U.S. Savings Bonds) and benefits from, or premiums paid to, legal services plans.

After determining your state AGI, you can calculate Hawaii taxable income by subtracting any applicable deductions. You may claim itemized deductions if the total of your itemized deductions you claim is larger than the Hawaii standard deduction. This stands at $2,200 for single filers and married persons filing separately and $4,400 for joint filers.

Hawaii Tax Credits

Once you have calculated your tax liability, there are tax credits you can claim in Hawaii to reduce the amount you have to pay. In some cases, if your tax liability is zero, these credits can actually return money to you (these are called refundable credits). The credits available include:

• Refundable Food/Excise Tax Credit: For tax year 2023, taxpayers with an AGI of less than $60,000 per year ($40,000 for single filers) may qualify for this credit based on food sales taxes.
• Credit for Low-Income Household Renters: This is a refundable credit for renters with a Hawaii AGI of less than $30,000.
• Credit for Child and Dependent Care Expenses: A refundable credit for some child care expenses.
• Credit for Child Passenger Restraint System: A refundable credit of $25 for taxpayers who purchased a child safety seat

Hawaii Capital Gains Tax

In Hawaii, the taxes you pay on long-term capital gains top out at 7.25%. Long-term capital gains are gains that are realized from the sale of investment you held for at least one year. Short-term capital gains are taxed at the full income tax rates listed above.

Hawaii Sales Tax

Hawaii doesn’t technically have a sales tax. However, the state does have a general excise tax that businesses are required to pay. They are allowed to (and often do) pass this tax on to customers. So in effect, Hawaiians statewide pay an extra 4% for services and goods. Additionally, one locality has an additional excise tax. Honolulu County, which is encompasses the entire island of Oahu, imposes an extra 0.50% to support the county transportation system. The County of Kauai also imposes an additional 0.50%, while the County of Hawaii charges an extra 0.25%. The County of Maui also has a 0.5% tax rate. 

While Hawaii’s GET is lower than the sales tax of most states, the tax applies to far more products and services than do sales taxes in most other states. Hawaii’s tax applies not only to finished products being sold to a consumer, but to just about any goods sold in the state, even if they are intended for resale. Also, unlike many other states, it applies to services, meaning the tax applies to health care providers, auto mechanics and legal services.

As mentioned above, businesses in Hawaii are able to pass the general excise tax to customers. The result is that goods and services often cost more. So if a business takes an item that would normally cost $100, and charges an additional $4.00 to cover the tax, the customer is effectively paying a 4% sales tax.

The most significant exception to the Hawaii GET is for prescription drugs and prosthetic devices. These are totally exempt for taxation. However, food (which is also typically exempt in other states) is subject to the tax, although low-income taxpayers may be eligible for a tax credit to negate some of the cost of the tax.

Hawaii Property Tax

Here's some good news about that Maui beach house you’ve been eyeing: The property taxes in Hawaii are some of the lowest in the country. The state’s effective property tax rate (annual taxes as a percentage of the median home value) is just 0.29%, the lowest of any U.S. state. However, because of high home values, average annual property tax payments in Hawaii are $1,893, which ranks near the middle of the pack among states.

If you’re considering buying a home in Hawaii, make sure to take a look at our our Hawaii mortgage rates guide which will help with all the details of getting a home loan in the state.

Hawaii Cigarette Tax

The tax on cigarettes in Hawaii is the second-highest in America. The tax adds up to $3.20 per pack of 20 cigarettes.

Hawaii Alcohol Tax

Excise taxes on alcohol in Hawaii vary greatly depending on the type of alcohol being purchased. The state’s beer taxes are 93 cents per gallon (or about 8.7 cents per beer). The state’s liquor taxes, however, add up to $5.98 per gallon.

Hawaii Estate Tax

There is an estate tax in Hawaii. The tax generally conforms to the federal estate tax, albeit with lower tax rates. The exemption for tax year 2023 is $5.49 million, which means that estates with a value below that cutoff do not pay any estate taxes. The estate tax ranges from 10% to 20% for estates that exceed the exclusion limit. 

Hawaii Gas Tax

While your options for long-distance drives are limited in Hawaii, the state's low gas taxes may make trips across the islands just a bit less expensive. The tax on regular gasoline is 16 cents per gallon, second-lowest in the country. Diesel is taxed at a state rate of 16 cents per gallon as well.

• There are three active volcanoes in Hawaii: Maunaloa, Kilauea and Loihi, which is an underwater volcano.
• The earliest human settlers to the Hawaiian Islands may have arrived as early as 300 CE (or 300 AD).
• According to the state of Hawaii, the Hawaiian chain comprises 137 islands but you generally only hear about the eight major islands.