How to Get Hawaii Sales Tax Permit | A Comprehensive Guide

Steve Bennett
Business Formation Expert  |   Fact Checked by Editorial Team
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Hawaii Sales Tax Permit

Have you ever wondered what a sales tax permit is in Hawaii? If you don’t, then we will guide you through it. In Hawaii, a sales tax permit, also known as a seller’s permit, is a legal document that allows businesses, specifically Hawaii LLC, to collect and remit sales tax to the Hawaii government. This permit ensures businesses operate legally and have the necessary permissions to conduct sales within a particular state. Hawaii has its own rules and regulations surrounding sales tax permits. Business owners must familiarize themselves with the requirements and processes to comply with the law.

In this comprehensive guide, Webinarcare Editorial Team will walk you through everything you need to know about obtaining and maintaining Hawaii Sales Tax Permit. From understanding the basics of sales tax to the intricacies of the application process, we have got you covered. You must be guided by all the factors gathered in this article.

What is a Sales Tax Permit?

A sales tax permit is Hawaii-issued license that allows businesses to collect and remit sales tax on the goods and services they sell. This permit ensures Hawaii businesses operate legally and have the necessary permissions to conduct sales within a particular state. In Hawaii, a sales tax permit is required for businesses that sell taxable goods or services and are required to collect sales tax from their customers.

Who Needs a Sales Tax Permit?

Not all businesses need a sales tax permit. Typically, businesses that sell tangible personal property or taxable services to customers within Hawaii require a sales tax permit. This includes brick-and-mortar stores, online retailers, and service providers. Hawaii may also require sales tax permits for businesses that sell certain types of products or services, such as alcohol or tobacco. If you plan to start a bakery business in Hawaii, you typically need a sales tax permit to collect and remit sales tax on the items you sell.

If your business operates in multiple states or forms a foreign LLC in Hawaii, you may need to obtain a sales tax permit for each state with a sales tax nexus. A sales tax nexus is a connection or presence a business has within a state that requires them to collect and remit sales tax. Factors that can create a nexus include the following:

  • Physical location
  • Employees
  • Inventory within a state

Obtaining a sales tax permit in Hawaii is not just about complying with regulations, but about seizing the opportunity to grow and thrive in the market. To start an LLC must be a gateway to establish a legitimate business presence and to build trust with customers. Embrace this essential step, for it paves the path towards success and prosperity.

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How to Get a Sales Tax Permit in Hawaii

The process for obtaining a sales tax permit varies from state to state. Generally, Hawaii businesses must apply through the Hawaii Department of Taxation. The following steps provide an overview of the application process:

Step 1: Determine If You Need a Sales Tax Permit 

Before applying, determine if your Hawaii business needs a sales tax permit based on the goods or services you sell and where you operate.

Most Hawaii businesses that sell tangible goods or services must have a sales tax permit. This includes:

  • Retailers – businesses that sell goods directly to consumers, such as clothing stores, grocery stores, and electronics stores.
  • Service Providers – businesses that provide services, such as hair salons, auto repair shops, and landscaping companies.
  • Wholesalers – businesses that sell goods to other businesses, such as distributors and manufacturers.
  • Online Sellers – businesses that sell goods or services online, including Hawaii E-commerce and online marketplaces.

Step 2: Register Your Hawaii Business

Register your business in Hawaii if you still need to. This may involve obtaining an Employer Identification Number (EIN) in Hawaii from the Internal Revenue Service and registering your business name with the Hawaii Secretary of State. 

Your Hawaii business name should be unique, memorable, and reflective of your products or services. There is a complete guide on Hawaii Business Name Search for a proper Hawaii business name. You can also check the availability of your desired business name by searching the Hawaii Business Express‘s website.

In obtaining an EIN, it can be done through the following:

  • Apply Online- The online EIN application is the preferred method for customers to apply for and obtain an EIN.
  • Apply by Fax- Taxpayers can fax the completed Form SS-4 application to the appropriate fax number), after ensuring that the Form SS-4 contains all of the required information.
  • Apply by Mail- The EIN application Form SS-4 can be filed via mail. The processing time frame to receive the mail is four weeks.
  • Apply by Telephone-International Applicants – International applicants may call 267-941-1099 (not a toll-free number) from 6 a.m. to 11 p.m. (Eastern Time) Monday through Friday to obtain their EIN.

Complete the registration for a legal Hawaii business if you plan to sell tangible goods. 

Recommended: Professional services have the EIN included in their LLC formation package. We recommend using –

LegalZoom – ($0 + State Fee for LLC formation)

Step 3: Gather The Necessary Information

The next step is to collect the required information for the Hawaii sales tax permit application. To obtain a sales tax permit in Hawaii, you will need to gather the following necessary information:

  1. Business Details: Provide the legal name, mailing address, and contact information of your business, including your Hawaii DBA (Doing Business As) names.
  2. Entity Type: Indicate whether your business is a sole proprietorship, partnership, corporation, LLC, or legal entity.
  3. EIN/SSN: Have your Employer Identification Number (EIN) or Social Security Number (SSN) ready. This identification is required to associate the sales tax permit with your business.
  4. Purpose of Permit: Explain the nature of your business activities, such as retail sales, wholesale, manufacturing, or service, to determine the appropriate sales tax category.
  5. Product/Service Description: Provide a brief description of the goods or services your business offers, including any unique details that may impact the sales tax requirements.
  6. Nexus Information: Identify if your business has a physical presence or nexus in Hawaii, such as a brick-and-mortar location, employees, or inventory storage.
  7. Estimated Sales: Estimate your expected monthly or annual sales volume in Hawaii to determine the appropriate tax registration and reporting requirements.
  8. Previous Registration: If you are already registered for sales tax in another state, provide details to determine if any reciprocal agreements or exemptions apply.
  9. Supporting Documents: Some states may require additional documentation, such as a copy of your business license, federal tax returns, or a certificate of authority.
  10. Fee Payment: Be prepared to pay the required fee for obtaining a sales tax permit in Hawaii.

It’s important to note the exact requirements and processes in Hawaii. It is recommended to visit the official website of the Hawaii Department of Taxation or consult with a tax professional for accurate and up-to-date information.

Step 4: Complete The Application

Fill out the sales tax permit application form for Hawaii, either online or by paper. Be prepared to answer questions about your business operations, products, and services. You can register your Hawaii sales tax permit in Hawaii Tax Online.

Step 5: Pay Any Required Fees

In Hawaii, the state permit may charge a fee for obtaining a sales tax permit. Be prepared to pay this fee when submitting your application. Usually, it costs $20. 

Step 6: Submit The Application

Submit your completed application, along with the required fee of $20, to the Hawaii Department of Taxation.

Step 7: Receive Your Permit

Once your application is approved, you will receive your sales tax permit. This may be a physical document or an electronic certificate you can print. 

How to Maintain a Sales Tax Permit

After obtaining a sales tax permit, Hawaii businesses must maintain compliance with Hawaii sales tax laws. This typically involves the following steps:

  • Collect Sales Tax: Collect sales tax from customers on taxable goods and services. Be sure to charge the correct sales tax rate based on your and your customer’s locations. The sales tax rate in Hawaii is 4.00%. 
  • Keep Accurate Records: Maintained detailed records of all sales transactions, including the amount of sales tax collected. This information will be required when filing your sales tax returns. Hire a certified public accountant (CPA) to keep track of records. 
  • File Sales Tax Returns: File sales tax returns with Hawaii, typically monthly, quarterly, or annually, depending on your sales volume and Hawaii requirements. Be sure to remit the sales tax collected during the reporting period.
  • Renew your Permit: Hawaii requires businesses to renew their sales tax permits periodically. Know your state’s renewal requirements and complete the necessary steps to maintain your permit.

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Penalties for Non-Compliance

Failure to obtain or maintain a sales tax permit can seriously affect a business. Penalties for non-compliance can include fines, penalties, interest charges, and even the revocation of your business license. Additionally, Hawaii businesses that fail to collect and remit the Hawaii sales tax may be held personally liable for the unpaid taxes.

Do I Need a Sales Tax Permit If I Only Sell Online?

You likely need a sales tax permit if you sell taxable goods or services online and have a sales tax nexus in Hawaii. To have a Home-Based Business in Hawaii, you must still file and maintain a sales tax permit. 

How Long Does Obtaining a Sales Tax Permit Take?

The processing time for sales tax permit applications takes time. In Hawaii, they may issue permits within a few days, while others may take several weeks. Be sure to apply well in advance of when you plan to start selling taxable goods or services.

Can I Have Multiple Sales Tax Permits?

Businesses that operate in multiple states or sell different types of products may need multiple sales tax permits. Be sure to research the specific requirements for each state and product type. Having a foreign LLC is not quite easy since you still need to hire a Resident Agent, file for the Articles of Organization of the state you wish to operate your business, and also, you need to have multiple sales tax permits. 

How Much Does a Sales Tax Permit Cost?

The costs and requirements for obtaining a sales tax permit vary depending on the state. To find accurate information about the cost of a sales tax permit in Hawaii, you can visit the Hawaii Department of Taxation’s website or consult with a tax professional or accountant familiar with your state’s regulations. They can provide the most up-to-date information on the costs and requirements for obtaining a sales tax permit in Hawaii.

FAQs

How do I obtain a sales tax permit in Hawaii?
You can obtain a sales tax permit in Hawaii by filling out the Retailers Application form, which is available online.
What is the sales tax rate in Hawaii?
The sales tax rate in Hawaii is 4%.
Do I need to provide a copy of my business license when applying for a sales tax permit in Hawaii?
Yes, you will need to provide a copy of your business license when applying for a sales tax permit in Hawaii.
How long does it take to obtain a sales tax permit in Hawaii?
It typically takes 3-4 weeks to obtain a sales tax permit in Hawaii.
Is there a fee to obtain a sales tax permit in Hawaii?
No, there is no fee to obtain a sales tax permit in Hawaii.
Can I apply for a sales tax permit in Hawaii before I have a physical presence in the state?
No, you cannot apply for a sales tax permit in Hawaii until you have a physical presence in the state.
What do I need to include in my Retailers Application form for a sales tax permit in Hawaii?
You will need to include basic information about yourself and your business, as well as information about your products and services.
Do I need to file sales tax returns in Hawaii even if I don’t have any sales?
Yes, you will need to file a sales tax return in Hawaii even if you don’t have any sales for that period.
How often do I need to file a sales tax return in Hawaii?
You will need to file a sales tax return in Hawaii quarterly.
What happens if I don’t file a sales tax return in Hawaii?
If you don’t file a sales tax return in Hawaii, you may be subject to penalties and interest.
Can I file my sales tax return online in Hawaii?
Yes, you can file your sales tax return online in Hawaii.
Do I need to keep records of my sales in Hawaii?
Yes, you will need to keep records of your sales in Hawaii.
What types of records do I need to keep for sales tax purposes in Hawaii?
You will need to keep records of your gross receipts, expense receipts, and other business records.
Are there exemptions to the Hawaii sales tax?
Some items, such as food and medicines, are exempt from the Hawaii sales tax.
What should I do if I am making sales in Hawaii but don’t have a sales tax permit?
If you are making sales in Hawaii but don’t have a sales tax permit, you should apply for one as soon as possible to avoid penalties.
Can I renew my Hawaii sales tax permit online?
Yes, you can renew your Hawaii sales tax permit online.
If I close my business, do I need to cancel my Hawaii sales tax permit?
Yes, you will need to cancel your Hawaii sales tax permit if you close your business.
Can I apply for a temporary Hawaii sales tax permit?
Yes, you can apply for a temporary Hawaii sales tax permit if you will be making sales in the state for a short period of time.
How can I check the status of my Hawaii sales tax permit application?
You can check the status of your Hawaii sales tax permit application by calling the Hawaii Department of Taxation.
Can I use my Hawaii sales tax permit in other states?
No, your Hawaii sales tax permit is only valid in Hawaii.
How do I update my business information on my Hawaii sales tax permit?
You can update your business information on your Hawaii sales tax permit by filling out the Change in Business Information form.
How do I close my Hawaii sales tax account?
You can close your Hawaii sales tax account by filling out the Request for Account Closure form.
What should I do if I receive a notice from the Hawaii Department of Taxation about my sales tax?
If you receive a notice from the Hawaii Department of Taxation about your sales tax, you should contact them as soon as possible.
Can I appeal a decision made by the Hawaii Department of Taxation related to my sales tax?
Yes, you can appeal a decision made by the Hawaii Department of Taxation related to your sales tax.
Can I make a payment for my Hawaii sales tax online?
Yes, you can make a payment for your Hawaii sales tax online.
How can I register for a Hawaii sales tax permit if I am out of state?
If you are out of state, you can register for a Hawaii sales tax permit by filling out the application online.
What should I do if I have questions about my Hawaii sales tax permit?
If you have questions about your Hawaii sales tax permit, you should contact the Hawaii Department of Taxation.
How much does it cost to obtain a sales tax permit in Hawaii?
There is no cost to obtain a sales tax permit in Hawaii.
What documents will I need to obtain a sales tax permit in Hawaii?
You will need to provide your Social Security or Federal Employer Identification number, your business name and address, and a description of your business.
Do I need a sales tax permit in Hawaii if my business is located outside of the state?
Yes, if you do business in the state of Hawaii, you need a sales tax permit.
How often do I need to renew my sales tax permit in Hawaii?
Your Hawaii sales tax permit is valid indefinitely.
Can I apply for a sales tax permit in Hawaii as an out-of-state entity?
Yes, you can apply for a sales tax permit in Hawaii as an out-of-state entity.
How do I amend information on my Hawaii sales tax permit?
You can amend your Hawaii sales tax permit by logging into Hawaii Tax Online and submitting a new application with updated information.
Can I transfer my Hawaii sales tax permit to a new business owner?
No, you cannot transfer your Hawaii sales tax permit to a new business owner.
What are the consequences of not obtaining a sales tax permit in Hawaii?
Failing to obtain a sales tax permit in Hawaii can result in penalties and interest charges.
Do I need a separate sales tax permit for each business location in Hawaii?
Yes, you do need a separate sales tax permit for each business location in Hawaii.
Do I need to collect sales tax on goods sold online to customers in Hawaii?
Yes, you need to collect sales tax on goods sold online to customers in Hawaii, as long as your business has a presence in Hawaii.
Do I need a sales tax permit in Hawaii if I only sell exempt goods or services?
Yes, you still need a sales tax permit in Hawaii even if you only sell exempt goods or services.
Can I obtain a temporary sales tax permit in Hawaii?
No, Hawaii does not offer temporary sales tax permits.
Will I receive a physical sales tax permit in Hawaii?
No, you will receive a certificate of registration number instead of a physical sales tax permit in Hawaii.
Can I file my Hawaii sales tax return online?
Yes, you can file your Hawaii sales tax return online through Hawaii Tax Online.
What is the deadline for filing a sales tax return in Hawaii?
Sales tax returns in Hawaii are due quarterly on the last day of the month following the end of the quarter.
Do I need to provide a copy of my federal tax return when applying for a sales tax permit in Hawaii?
No, you do not need to provide a copy of your federal tax return when applying for a sales tax permit in Hawaii.
What should I do if my business stops making sales in Hawaii?
You should cancel your sales tax permit, which can be done through Hawaii Tax Online.
Can I still apply for a sales tax permit in Hawaii if I have outstanding tax debt in another state?
Yes, you can still apply for a sales tax permit in Hawaii if you have outstanding tax debt in another state.
What is the Hawaii sales tax rate?
The Hawaii sales tax rate is called the general excise tax, and it ranges from 0.15% to 4.5%, depending on the type of business.
Are there any local sales tax rates in Hawaii?
No, there are no local sales tax rates in Hawaii.
Do I need to collect sales tax on services sold in Hawaii?
Yes, you need to collect sales tax on services sold in Hawaii, as long as your business has a presence in Hawaii.
What happens if I fail to file a sales tax return in Hawaii?
Failing to file a sales tax return in Hawaii can result in penalties and interest charges.
Are there any sales tax exemptions in Hawaii?
Yes, there are some sales tax exemptions in Hawaii, such as for prescription drugs and certain medical supplies.
Can I file a sales tax return in Hawaii with zero sales?
Yes, you can file a sales tax return in Hawaii with zero sales.
How do I cancel my Hawaii sales tax permit?
You can cancel your Hawaii sales tax permit by logging into Hawaii Tax Online.
What is the penalty for failing to obtain a sales tax permit in Hawaii?
The penalty for failing to obtain a sales tax permit in Hawaii is $20 per day, up to a maximum of $1,000.

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Conclusion

Obtaining and maintaining a sales tax permit is crucial to running a compliant and successful business. By understanding the requirements and processes in Hawaii, you can ensure that your business collects and remits sales tax correctly and avoids any penalties for non-compliance. Consulting with a tax professional or Hawaii attorney is recommended to ensure that your Hawaii business meets all necessary sales tax requirements.

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