For fiscal 2011, which ended June 30, total revenue for the state from all sources amounted to $10.24 billion. The biggest sources of tax revenue included the General Excise and Use Tax, individual and corporate state income tax, and the Transient Accommodations Tax.
Taxes generated about $4.3 billion total for the state in fiscal 2011, with the GET accounting for $2.42 billion.
General Excise and Use Tax (GET)
The General Excise and Use Tax is the state’s largest source of tax revenues. In fiscal 2011, it produced more than half the state’s collections, or $2.42 billion. The GET is a 4 percent charge levied on businesses based on their gross revenue. The tax is charged to the business or individual receiving income for goods and services, rather than the customer.
In Honolulu, an additional 0.5 percent is charged to pay for the Honolulu Rail Project.
The use tax, meanwhile, is a charge for the use of imported goods or services in the state. The tax is also 4 percent in some cases, but can be 0.5 percent on goods to be sold by retailers, leased or rented or incorporated into a product manufactured in the state.
Income tax — the levy placed on taxable income for individuals and businesses — is the second biggest contributor to tax collections. Personal income tax brought in $1.22 billion worth of taxes in fiscal 2011, and corporate income tax represented $51 million. Personal income tax ranges from 1.4 percent to 8.25 percent. Corporate tax ranges from 4.4 percent to 6.4 percent.
Transient Accommodations Tax
The Transient Accommodations Tax — commonly known as the hotel tax — is a fee of 9.25 percent charged on room or apartment rent of any facility that will house a “transient” — that is, a visitor who lives in that room or suite for 180 consecutive days or less. In fiscal 2011, it raised $70.4 million for the state’s general fund.
Most of the TAT goes to the counties, which receive 44.8 percent (44.1 percent to Honolulu, 22.8 percent to Maui County, 18.6 percent to Hawaii County, and 14.5 percent to Kauai County). The counties’ share amounts to approximately $90 million each year.
The rest goes to special funds, such as the Convention Center Enterprise Special Fund (17 percent), the Tourism Special Fund (34 percent), the States Parks Special Fund and the Special Land and Development Fund.
Other taxes include:
- Public Service Company
- Estate and Transfer
- Liquor and Permits
- Insurance Premiums
- Cigarette and Tobacco
- Financial institutions
- Rental Motor Vehicle and Tour Vehicle
- Unemployment insurance