Is There a Sales Tax Nexus in Hawaii?

November 13, 2020

Sales tax nexus in Hawaii was one of many that adjusted how remote sellers and marketplace facilitators must collect and remit sales tax.

Erik Wallin

Author

Sovos

This blog was last updated on November 13, 2020

Following the South Dakota v. Wayfair, Inc. decision, economic nexus laws began to change around the country. Sales tax nexus in Hawaii was one of many that adjusted how remote sellers and marketplace facilitators must collect and remit sales tax. We have highlighted the major points below for organizations.

Enforcement date:
July 1, 2018.

Sales/transactions threshold:
$100,000 or 200 transactions.

Measurement period:
Threshold applies to the previous or current calendar year.

Included transactions/sales:
Retail sales of tangible personal property delivered into the state.

When You Need to Register Once You Exceed the Threshold:
Next transaction.

Summary: Hawaii imposes a tax collection and remittance obligation is created if a seller meets either of the threshold requirements in the preceding or current calendar year. Hawaii deems marketplace facilitators as the sellers of tangible personal property, intangible property, or services. However, marketplace sellers are deemed to be making wholesale sales to the facilitators. Because of this Hawaii will collect 4% GET from marketplace facilitators and an additional 0.5% from marketplace sellers that meet the Hawaii economic nexus threshold.

Hawaii law also requires other persons who provide a forum for listing of tangible personal property and the taking or processing of orders to report information about purchasers to the Department of Taxation.

Remote sellers and marketplace facilitators in Hawaii must work with the right partner to help ensure that they stay compliant with all regulatory requirements, especially as the laws change.

Hawaii Sales Tax Resources: For more information on the sales tax nexus requirements in Hawaii, reach out to our team. Additionally, click through our real-time interactive sales tax nexus map for the latest on each state.

Erik Wallin

Erik Wallin is a Senior Tax Counsel on the Tax Research Team at Sovos Compliance. Erik has been with Sovos Compliance since 2011, and his main areas of focus are on U.S. Transaction Tax Law which includes special expertise in the taxation of technology and the taxation mechanisms that apply throughout the Colorado home rule jurisdictions. Erik is a member of the Massachusetts Bar, has a B.A. from York College of Pennsylvania, a J.D. from New England School of Law, and an LL.M. in Taxation from Boston University.

Stay up to date with the latest tax and compliance updates that may impact your business.