Keeping your Hawaii business legally compliant means understanding and fulfilling your business’s tax obligations at the local, state, and federal levels. If this sounds scary, we’re here to help. Read our guide to learn more about the types of state business taxes you might need to pay as an Hawaii small business, how to pay them, and when they are due. Our Worry-Free Compliance Service keeps track of your business’s important filing and compliance deadlines and alerts you when a deadline is coming.
Paying taxes is an essential part of running a business. In fact, doing so is crucial to ensuring that your Hawaii business stays legally compliant with the state. Knowing exactly what taxes you need to pay and when can cause anxiety for even the most experienced small business owners. If filing state taxes has you feeling nervous, we’re here to help. Read on to learn more about the types of taxes you might face as a Hawaii business owner and how and when to pay them. You’ll also learn which of our products and services can help make the process smoother when tax time comes around.
If you need more complete legal compliance help, check out our Worry-Free Compliance service, which keeps your business documents organized and can help keep you on track with required business filings. If you’re looking for information about federal taxes, head over to our page on federal taxes for small businesses.
The first step to take is to identify and understand your business’s corporate income tax obligations. The amount and rate you must pay depends on your business’s entity structure.
As in most states, Hawaii corporations will usually be subject to a corporate income tax. Specifically, the State of Hawaii taxes the income of corporations at a series of marginal rates from 4.4% to 6.4%. The Hawaii business tax rate brackets are as follows:
Importantly, however, not all small businesses will be subject to a corporate income tax at the entity level. Taxes for certain entities, referred to as pass-through entities, are instead paid by members and owners of the business itself on their individual income tax returns. Examples of pass-through entities include:
If your business does owe corporate income taxes, these will be due on the 20th day of the fourth month after the close of the tax year. Thus, for businesses following the calendar year, the due date will be April 20th.
In addition to business income taxes, you also need to understand your employment tax obligations.
In most cases, your Hawaii small business must pay state employment taxes if it has employees. Hawaii calls these withholding taxes. Withholding taxes are taken directly out of an employee’s wages and paid by the employer to the State of Hawaii.
An employer must withhold taxes on wages for any services performed within the state. It must also withhold taxes on wages performed outside the state if the services were performed by an employee whose regular place of employment for the employer is inside the State of Hawaii.
Withholding tax rates in Hawaii range from 1.4% to 7.9% depending on a number of factors. If your business must pay withholding taxes, it must file its returns quarterly. Thus, these will be due on April 15, July 15, October 15, and January 15 each year.
In addition to corporate income and withholding taxes, your business may have other tax obligations to be aware of.
For example, regardless of whether your small business must pay corporate income taxes, all persons and entities that conduct business in Hawaii must also pay general excise/use tax (GET). This tax is a privilege tax imposed on the gross income received by entities engaging in nearly any type of business activity. Further, even if you didn’t make any profit, your business must still file your GET return.
Another possible tax you may have to pay is unemployment insurance tax. These are also called UI contributions. If you’re an employer, you must pay these UI contributions based on your employees’ wages. These contributions are in turn held in a trust fund and are used to pay temporary benefits to eligible unemployed individuals.
Additionally, your business may need to obtain certain tax licenses depending on your business activities for goods and services related to transient accommodations, rental motor vehicles, cigarettes and tobacco, liquor, and fuel.
Once you’ve determined your tax obligations, you’re ready to prepare and file.
Hawaii Tax Online offers Hawaii business owners a convenient and secure way to e-file tax returns, make payments, and manage your accounts. Make sure to create an account to streamline the process and save time later on.
It’s true that filing your taxes correctly is crucial to the future success of your business. This can often make filing taxes for your Hawaii small business feel overwhelming and stressful. However, one of the best things you can do to relieve some of this stress is to prepare well in advance and make sure you have all the information you will need readily available.
Information and documents you will likely need to file your taxes include:
This means that it’s important to carefully track your business’s income and expenses.
It can seem tempting to want to handle everything on your own for your new or growing business. However, when it comes to filing taxes for your Hawaii small business, we recommend seeking some assistance from an experienced tax professional.
In fact, most small businesses will benefit greatly from professional accounting help. This is because failure to file your Hawaii small business taxes, or even just filing them incorrectly, can result in a number of severe consequences. Further, these consequences can fall on both the business entity as a whole as well as on you and any other individual owners.
Thus, if you do seek assistance, we also recommend that you work with an accountant that has the credentials and qualifications to help you with your small business tax needs.
Never be afraid to ask for help when it comes to something as important as your taxes.
Not sure how to stay compliant? Learn more about legal compliance for small business owners.
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Any business entity that conducts business within the State of Hawaii will have to pay some taxes. Thus, no matter what size your Hawaii small business is, you can expect to pay taxes, either at the individual or entity level.
In short, the answer is that it depends. The amount you’ll have to pay for business taxes in Hawaii will vary. This is because there are a variety of taxes, such as corporate income taxes, general excise taxes (GET), and withholding taxes, each with varying percentages and requirements.
Taxes for your Hawaii small business are due to the Hawaii Department of Taxation. You can easily and efficiently pay your taxes online through the Hawaii Tax Online portal.
Yes, you will have to file taxes for your Hawaii small business. Failure to do so properly and timely can lead to severe consequences for the business. Thus, make sure to speak with a qualified accountant to better understand and comply with your Hawaii tax obligations.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
Hawaii Business Resources
Small Business Tax Information by State
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