Tax policy in Hawaii
 in Hawaii |
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| Tax policy in Hawaii | |
 | |
| Tax rates in 2017 | |
| Personal income tax: 1.4% to 8.25% | |
| State sales tax: 4.00% | |
| Corporate income tax: 4.40% to 6.4% | |
| Tax revenues in 2016 | |
| Total tax collections: $6.92 billion | |
| Tax collections per capita: $4,843 | |
 | |
| Total state expenditures • State debt • Hawaii state budget and finances | |
Hawaii generates the bulk of its tax revenue by levying a personal income tax and a sales tax. The state derives its constitutional authority to tax from Article VII of the state constitution.[1][2]
Tax policy can vary from state to state. States levy taxes to help fund the variety of services provided by state governments. Tax collections comprise approximately 40 percent of the states' total revenues. The rest comes from non-tax sources, such as intergovernmental aid (e.g., federal funds), lottery revenues and fees. The primary types of taxes levied by state governments include personal income tax, general sales tax, excise (or special sales) taxes and corporate income tax.[3]
Tax rates
Personal income tax
- See also: Personal income tax
Hawaii utilized a personal income tax rate ranging from 1.4 percent to 8.25 percent in 2017. An individual's tax liability varies according to his or her tax bracket. A tax bracket is the income range to which a tax rate applies.[4]
The table below summarizes personal income tax rates for Hawaii and neighboring states in 2017.[4]
| Personal income tax rates, 2017 | ||||||
|---|---|---|---|---|---|---|
| State | Tax rates | Number of brackets | Brackets | |||
| Lowest | Highest | Lowest | Highest | |||
| Hawaii | 1.4% | 8.25% | 9 | $2,400 | $48,000 | |
| Alaska | No state income tax | |||||
| Oregon | 5% | 9.9% | 4 | $3,400 | $125,000 | |
| Washington | No state income tax | |||||
| Note: For complete notes and annotations, please see the source below. Source: Tax Policy Center, "Individual State Income Tax Rates 2000-2017," accessed October 26, 2017 | ||||||
Personal exemptions
States that collect a personal income tax allow individuals to claim personal exemptions on income taxes each year. The personal exemption indicates that only a person's income above a certain level is subject to taxation. [5]
Exemptions work by reducing the amount of an individual's taxable income. Both state and federal taxes allow exemptions. The state exemptions for Hawaii and its neighboring states as reported by the Tax Policy Center are reported in the chart below.[6]
| Personal exemptions, 2017 | |||
|---|---|---|---|
| State | Single | Married | Dependents |
| Hawaii | $1,144 | $2,288 | $1,144 |
| Alaska | No state income tax | ||
| Oregon | $197 | $394 | $197 |
| Washington | No state income tax | ||
| Note: For complete notes and annotations, please see the source below. Source: Tax Policy Center, "Individual State Income Tax Rates 2000-2017," accessed October 26, 2017 | |||
Capital gains tax
- See also: Capital gains tax
A capital gains tax is a tax levied on the profit gleaned from the sale of a capital asset. Examples of capital assets include stocks, businesses, land parcels, homes, personal items and more. Capital gains are taxable at both the federal and state levels. While the federal government taxes capital gains at a lower rate than regular personal income, states usually tax capital gains at the same rates as regular income. [7][8][9]
The table below summarizes uppermost capital gains tax rates for Hawaii and neighboring states in 2015.
| Uppermost capital gains tax rates by state, 2015 | |||
|---|---|---|---|
| State | State uppermost rate | Combined uppermost rate | |
| Hawaii | 7.3% | 29.4% | |
| Alaska | 0% | 25% | |
| Oregon | 9.9% | 31% | |
| Washington | 0% | 25% | |
| Note: For complete notes and annotations, please see the source below. Source: Tax Foundation, "The High Burden of State and Federal Capital Gains Tax Rates," accessed October 26, 2017 | |||
Sales tax
- See also: Sales tax
Almost all states employ a statewide sales tax, which ranges from 2.9 percent in Colorado to 7.25 percent in California. Additionally, many states allow the levying of local sales taxes, which are then added to the state's tax.
Hawaii's state sales tax was 4.00% percent in 2017. The average local tax was about 0.35% percent, meaning that the average combined sales tax was about 4.35% percent. The table below displays the state tax rates, average local tax rates, and average combined tax rates for Hawaii and its neighboring states.[10]
| Combined sales tax rates, 2015 | ||||
|---|---|---|---|---|
| State | State sales tax | Average local sales tax | Combined | |
| Hawaii | 4.00% | 0.35% | 4.35% | |
| Alaska | 0.00% | 1.76% | 1.76% | |
| Oregon | 0.00% | 0.00% | 0.00% | |
| Washington | 6.50% | 2.42% | 8.92% | |
| Note: For full annotations, see the source below. Source: The Tax Foundation, "State and local sales tax rates, 2017," accessed October 26, 2017 | ||||
The table below summarizes sales tax rates for Hawaii and neighboring states in 2017 as well as the state's policy with respect to types of items commonly exempted from sales tax (i.e., food, prescription drugs and nonprescription drugs).[11]
| Sales tax rates, 2017 | ||||
|---|---|---|---|---|
| State | Sales tax rate | Exemption status | ||
| Food | Prescription drugs | Nonprescription drugs | ||
| Hawaii | 4.0% | Taxable | Exempt | Taxable |
| Alaska | 0.0% | No state sales tax | No state sales tax | No state sales tax |
| Oregon | 0.0% | No state sales tax | No state sales tax | No state sales tax |
| Washington | 6.5% | Exempt | Exempt | Taxable |
| Source: Tax Policy Center, "Sales Tax Rates 2000-2017," accessed October 26, 2017 | ||||
Excise taxes
- See also: Excise taxes
Excise taxes, also known as selective sales or differential commodity taxes, are levied for the sales of specific goods or services. Excise taxes are considered indirect taxes because they are not charged directly to individuals. In most cases, the excise tax is paid by the producer or seller of an item. The cost of the tax is then included in the sale price of the item and passed on to the consumer. The tables below provide excise tax rates for motor fuel, alcohol and cigarettes in Hawaii and neighboring states.[12][13][14][15]
| Fuel excise tax rates, 2017 (in cents per gallon) | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| State | Gasoline | Diesel | Gasohol | ||||||
| Excise tax | Other taxes | Total tax | Excise tax | Other taxes | Total tax | Excise tax | Other taxes | Total tax | |
| Hawaii | 16¢ | 0¢ | 16¢ | 16¢ | 0¢ | 16¢ | 16¢ | 0¢ | 16¢ |
| Alaska | 8¢ | 0.95¢ | 8.95¢ | 8¢ | 0.95¢ | 8.95¢ | 8¢ | 0.95¢ | 8.95¢ |
| Oregon | 30¢ | 0¢ | 30¢ | 30¢ | 0¢ | 30¢ | 30¢ | 0¢ | 30¢ |
| Washington | 49.4¢ | 0¢ | 49.4¢ | 49.4¢ | 0¢ | 49.4¢ | 49.4¢ | 0¢ | 49.4¢ |
| Note: For full annotations, see the source below. Source: Tax Policy Center, "State Motor Fuels Tax Rates 2000-2011, 2013-2017," accessed October 26, 2017 | |||||||||
| Alcohol excise tax rates, 2017 (in dollars per gallon) | ||||||
|---|---|---|---|---|---|---|
| State | Liquor | Wine | Beer | |||
| Tax rate | Does general sales tax apply? | Tax rate | Does general sales tax apply? | Tax rate | Does general sales tax apply? | |
| Hawaii | $6.0 | Yes | $1.4 | Yes | $0.9 | Yes |
| Alaska | $12.8 | N/A | $2.5 | N/A | $1.1 | N/A |
| Oregon | See footnote 1 | N/A | $0.7 | N/A | $0.1 | N/A |
| Washington | $14.3 | -- | $0.9 | Yes | $0.3 | Yes |
| Note: For full annotations, see the source below. 1"In 17 states, the government directly controls the sales of distilled spirits. Revenue in these states is generated from various taxes, fees, price mark-ups, and net liquor profits." 2"General sales tax applies to on-premise sales only." Source: Tax Policy Center, "Alcohol Rates 2000-2010, 2013-2017," accessed October 26, 2017 | ||||||
| State cigarette taxes, 2017 (in cents per pack) | ||
|---|---|---|
| State | Tax rate | National ranking |
| Hawaii | 320¢ | 5 |
| Alaska | 200¢ | 13 |
| Oregon | 132¢ | 30 |
| Washington | 302.5¢ | 8 |
| Note: For full annotations, see the source below. Source: Tax Policy Center, "State Cigarette Taxes, 2017," accessed October 26, 2017 | ||
Corporate income tax
- See also: Corporate income tax
Hawaii levies a corporate income tax rate of 4.40 to 6.40 percent. The table below compares the corporate income tax rates of some of its neighboring states.[16][17]
| Corporate income tax rates, 2016 | ||||
|---|---|---|---|---|
| State | Tax rate | Brackets | Number of brackets | |
| Lowest | Highest | |||
| Hawaii | 4.40% to 6.4% | $25,000 | $100,000 | 3 |
| Alaska | 0% to 9.40% | $25,000 | $222,000 | 10 |
| Oregon | 6.60% to 7.60% | $1,000,000 | $1,000,000 | 2 |
| Washington | No corporate income tax | |||
| Note: For complete notes and annotations, please see the source below. Source: Tax Foundation, "State Corporate Income Tax Rates and Brackets for 2015," accessed October 26, 2017 | ||||
Property tax
- See also: Property tax
Most often, property tax applies to real estate, although some states levy property taxes on other types of personal property, such as automobiles. Generally speaking, an individual's property tax liability is determined by the tax rate and the tax base, which is "determined by both the assessed value of the property and ... the share of the assessed value that is subject to tax." To learn more about property taxes, including tabulation methods, see this page. Property tax rates can vary substantially from locality to locality within a state.[18][19][20] [18][19]
The table below provides the mean amount of property taxes paid in 2012, as well as property tax as a mean percentage of home value for 2014, in Hawaii and neighboring states.[18]
| Mean property taxes paid per state, 2012 and 2014 | ||
|---|---|---|
| State | Mean property taxes paid (2012) | Property tax as a percent of home value (2014) |
| Hawaii | $1,351 | 0.28% |
| Alaska | $3,290 | 1.01% |
| Oregon | $2,594 | 1.01% |
| Washington | $2,914 | 0.94% |
| Source: Tax Policy Center, "Residential Property Taxes in the United States," November 18, 2013 Source: Tax Foundation, "Facts & Figures 2016: How Does Your State Compare?", accessed October 27, 2017 | ||
The table below lists per capita state and local property tax collections for Hawaii and neighboring states for fiscal year 2013.[21]
| State and local property tax collections per capita, 2013 | ||
|---|---|---|
| State | Collections per capita | |
| Hawaii | $943 | |
| Alaska | $1,913 | |
| Oregon | $1,285 | |
| Washington | $1,350 | |
| Source: Tax Foundation, "Facts and Figures 2016: How Does Your State Compare?" accessed October 26, 2017 | ||
Estate and inheritance taxes
- See also: Estate and inheritance taxes
Estate and inheritance taxes are levied on the property of deceased individuals (decedents). Generally speaking, an estate tax is applied to the value of a decedent's property and is paid from the estate before distribution to any heirs. By contrast, an inheritance tax is paid by the heir or heirs of a decedent's assets.[22][23][24]
Hawaii is one of 14 states that levies an estate tax. In addition, residents are liable for the federal estate tax. The table below summarizes the estate tax rates for Hawaii and neighboring states in 2016.[24]
| Estate taxes, 2016 | |||
|---|---|---|---|
| State | Exemption threshold | Minimum rate | Maximum rate |
| Hawaii | $5,450,000 | 0.80% | 16.00% |
| Alaska | N/A | ||
| Oregon | $1,000,000 | 10.00% | 16.00% |
| Washington | $2,078,000 | 10.00% | 20.00% |
| Note: For complete notes and annotations, please see the source below. Source: Tax Foundation, "Facts and Figures 2015: How Does Your State Compare?" accessed October 5, 2015 | |||
Tax revenues
- See also: Hawaii state budget and finances
The table below breaks down state government tax collections by source in 2016 (comparable figures from surrounding states are also provided to give additional context). Figures for all columns except "2016 population" and "Per capita collections" are rendered in thousands of dollars (for example, $2,448 translates to $2,448,000). Figures in the columns labeled "2016 population" and "Per capita collections" have not been abbreviated.[25]
| State tax collections by source ($ in thousands), 2016 | ||||||||
|---|---|---|---|---|---|---|---|---|
| State | Property taxes | Sales and gross receipts | Licenses | Income taxes | Other taxes | Total | 2016 population | Per capita collections |
| Hawaii | N/A | $4,315,902 | $263,130 | $2,224,299 | $115,704 | $6,919,035 | 1,428,557 | $4,843 |
| Alaska | $111,736 | $260,846 | $120,529 | $212,252 | $336,801 | $1,042,164 | 741,894 | $1,405 |
| Oregon | $20,587 | $1,532,190 | $1,048,709 | $8,299,887 | $141,938 | $11,043,311 | 4,093,465 | $2,698 |
| Washington | $2,062,065 | $17,636,031 | $1,461,200 | N/A | $1,120,792 | $22,280,088 | 7,288,000 | $3,057 |
| United States | $18,364,298 | $442,909,995 | $52,164,396 | $392,286,910 | $24,538,146 | $930,263,745 | 322,762,018 | $2,882.20 |
| Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed June 26, 2017 | ||||||||
The table below lists 2016 tax collections by source as percentages of total collections. About 62.4 percent of Hawaii's total state tax collections came from sales taxes and gross receipts.[25]
| State tax collections by source (as percentages), 2016 | |||||
|---|---|---|---|---|---|
| State | Property taxes | Sales and gross receipts | Licenses | Income taxes | Other taxes |
| Hawaii | N/A | 62.4% | 3.8% | 32.1% | 1.7% |
| Alaska | 10.7% | 25.0% | 11.6% | 20.4% | 32.3% |
| Oregon | 0.2% | 13.9% | 9.5% | 75.2% | 1.3% |
| Washington | 9.3% | 79.2% | 6.6% | N/A | 5.0% |
| Source: U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed April 4, 2016 | |||||
Tax ballot measures
| Voting on taxes | ||||||||
|---|---|---|---|---|---|---|---|---|
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| Ballot measures | ||||||||
| By state | ||||||||
| By year | ||||||||
| Not on ballot | ||||||||
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- See also: Taxes on the ballot and List of Hawaii ballot measures
Ballotpedia has tracked the following ballot measures relating to taxes in Hawaii.
- Hawaii Tax Rebates Amendment, Question 2 (2010)
- Hawaii Excess Revenue Refund, Amendment 1 (1984)
- Hawaii Tax Review and Conformance, Amendment 15 (1978)
- Hawaii County Tax Authority, Amendment 16 (1978)
Recent news
The link below is to the most recent stories in a Google news search for the terms Hawaii taxes. These results are automatically generated from Google. Ballotpedia does not curate or endorse these articles.
See also
- Hawaii
- Hawaii state budget and finances
- Personal income tax
- Sales tax
- Corporate income tax
- Property tax
External links
Footnotes
- ↑ Hawaii Legislative Reference Bureau, "The Constitution of the State of Hawaii," accessed October 17, 2014
- ↑ Tax Policy Center, "State Tax Collection Shares by Type 2000-2013," June 20, 2014
- ↑ Brunori, D. (2011). State Tax Policy: A Political Perspective. Washington, D.C.: The Urban Institute Press
- ↑ 4.0 4.1 Tax Policy Center, "Individual State Income Tax Rates 2000-2017," accessed October 26, 2017
- ↑ Tax Policy Center, "What is the personal exemption?" accessed December 14, 2015
- ↑ Internal Revenue Service, "3. Personal Exemptions and Dependents," accessed December 14, 2015
- ↑ Internal Revenue Service, "Topic 409 - Capital Gains and Losses," August 19, 2014
- ↑ Tax Foundation, "The High Burden of State and Federal Capital Gains Tax Rates," February 11, 2014
- ↑ Tax Policy Center, "Capital Gains and Dividends: How are capital gains taxed?" June 22, 2011
- ↑ The Tax Foundation, "State and local sales tax rates, 2017," accessed October 26, 2017
- ↑ Tax Policy Center, "Sales Tax Rates 2000-2017," accessed October 26, 2017
- ↑ Tax Policy Center, "Excise taxes," accessed October 20, 2014
- ↑ Investopedia, "Excise Tax," accessed October 20, 2014
- ↑ Tax Foundation, "Excise Taxes," accessed October 20, 2014
- ↑ Internal Revenue Service, "Excise Tax," accessed October 20, 2014
- ↑ Investopedia, "Corporate Tax," accessed September 24, 2014
- ↑ Tax Foundation, "State Corporate Income Tax Rates and Brackets for 2015," accessed October 7, 2015
- ↑ 18.0 18.1 18.2 Tax Policy Center, "Residential Property Taxes in the United States," November 18, 2013
- ↑ 19.0 19.1 Bankrate, "Property taxes explained," February 3, 2000
- ↑ Investopedia, "Property Tax," accessed September 26, 2014
- ↑ Tax Foundation, "Facts and Figures 2015: How Does Your State Compare?" accessed October 5, 2015
- ↑ About.com, "What's the Difference Between an Estate Tax and an Inheritance Tax?" accessed October 16, 2014
- ↑ Internal Revenue Service, "Estate Tax," updated September 29, 2014
- ↑ 24.0 24.1 Tax Foundation, "Facts and Figures, 2015," accessed October 6, 2015
- ↑ 25.0 25.1 U.S. Census Bureau, "2016 annual survey of state government tax collections by category," accessed June 26, 2017
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