Hawaii Tax Guide: High Rates in Paradise

Navigate Hawaii's steep income tax brackets, unique General Excise Tax, and property tax rules for the 2025 tax year.

11%

Top Income Tax Rate

4.0-4.5%

GET Rate

0.32%

Property Tax Rate

Tax Burden Rank

Tax Overview

Hawaii has one of the highest income tax rates in the nation, with a progressive system featuring 12 brackets and a top rate of 11% on income above $200,000. Only California has a higher top rate. The state's income tax applies to all forms of income, including wages, investment income, and retirement distributions, though Social Security benefits are exempt.

Instead of a traditional sales tax, Hawaii imposes a General Excise Tax (GET) at 4% (4.5% in Honolulu County). The GET is unique because it is technically levied on businesses at every level of production, meaning it pyramids as goods move through the supply chain. This makes the effective tax burden higher than the nominal rate. Unlike most states, the GET applies to virtually everything, including groceries, medical services, and rent.

Property taxes in Hawaii are surprisingly low in rate terms, with effective rates among the lowest in the nation. However, because property values in Hawaii are extremely high, actual property tax bills can still be substantial. The state offers a homeowner exemption that reduces the assessed value and provides additional exemptions for seniors, disabled individuals, and veterans.

Income Tax

Hawaii has 12 income tax brackets with the second-highest top rate in the nation at 11%. The brackets start applying relatively quickly even at modest income levels.

Income Range	Tax Rate
$0 – $2,400	1.4%
$2,401 – $4,800	3.2%
$4,801 – $9,600	5.5%
$9,601 – $14,400	6.4%
$14,401 – $19,200	6.8%
$19,201 – $24,000	7.2%
$24,001 – $36,000	7.6%
$36,001 – $48,000	7.9%
$48,001 – $150,000	8.25%
$150,001 – $175,000	9%
$175,001 – $200,000	10%
$200,001 +	11%

Sales Tax

State Rate4.00%

Avg. Local Rate0.44%

Combined Rate4.44%

Property Tax

Effective Rate0.32%

Median Annual Bill$2,313

Key Deductions in Hawaii

✓Standard deduction of $2,200 (single) or $4,400 (married filing jointly)
✓Personal exemption of $1,144 per person
✓Refundable food/excise tax credit for low-income households
✓Renewable energy technology tax credit
✓Capital goods excise tax credit for businesses
✓Child and dependent care tax credit

Filing Information

Filing Deadline: April 20

Tax Authority: Hawaii Department of Taxation

Phone: (808) 587-4242

Website: https://tax.hawaii.gov

Frequently Asked Questions

What is the General Excise Tax in Hawaii?

The GET is Hawaii's equivalent of a sales tax, but it applies to virtually all business transactions, including services, rent, and groceries. The base rate is 4% (4.5% in Honolulu). Because it applies at every level of production, the effective rate is higher than the nominal rate.

Does Hawaii tax retirement income?

Hawaii does not tax Social Security benefits. However, most other retirement income, including pensions, 401(k) distributions, and IRA withdrawals, is fully taxable at the state's progressive income tax rates.

Why are Hawaii property tax rates so low?

Hawaii's property tax rates are among the lowest in the nation in percentage terms. However, because Hawaii has the highest median home values in the country, actual property tax bills are still significant. The low rates are partly offset by very high property assessments.

Is Hawaii an expensive state for taxes overall?

Yes, Hawaii has one of the highest overall tax burdens in the nation when combining income taxes, GET, and the high cost of living. The top income tax rate of 11% and the broad-based GET make it one of the most heavily taxed states.

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