Taxes in Hawaii


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Hawaii - State

Residents in Hawaii endure higher-than-average income tax rates, but they are offset by gloriously low property taxes. Below, we explain various Hawaii state taxes affecting retirement income, such as sales tax, inheritance tax, and property taxes.

For information regarding taxes in other states, see Retirement Taxes by State.

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Hawaii Tax Rates

State Sales Tax0%
Avg State/Local Sales Tax4% GET
Gas Tax$0.16 per gallon
Diesel Tax$0.16 per gallon
Cigarette Tax$3.20 per pack
Income Tax11%
Effective Tax Rate:8.46%
Property Tax0.28%
Social Security TaxNone
Medical/Dental Deduction:None
Federal Income Tax Deduction:None
Retirement TaxPartial
State Taxes in Hawaii

Hawaii State Taxes Explained

Hawaii Sales Tax

Hawaii has no sales tax but charges a General Excise Tax (GET) of 4%. Local governments may charge separate sales tax and one or more special district taxes or mass transit tax. Combined GET rates in Hawaii range from 4% to 4.5%. Prescription medications are tax-exempt, but you’ll pay sales tax on prescribed medical devices and all other sales, including groceries.

Hawaii Income Taxes

For higher-income residents, The Aloha State levies a steep income tax rate of 11%. Most others will pay around 9%.

Hawaii Property Taxes

The average effective property tax rate in Hawaii is 0.28%. The median home value is the highest in the nation at $615,300. However, the property tax on this assessed value is only $1,715.

Personal property such as cars or boats is not subject to property tax. Real property and land are assessed at 100% “fair market value.” Taxes are administered by the four counties and vary by location. For many, the homestead exemption is $12,000, but it will rise to $40,000 if you live in Honolulu. Persons 60 to 69 years of age may claim double the homestead exemption, while those aged 70 or older, may claim 2.5 times the homestead exemption. A typical homestead exemption for seniors is $120,000 to $180,000 for the minimum age of 60 or 65 (depending on the county). This amount may increase from $140,000 to $200,00 based on annual gross income combined with the minimum age of 70 or 75.

Disabled veterans are eligible for property tax breaks. For example, the county of Kauai has a flat $100 property tax for veterans who are totally disabled due to injuries received while on active duty.

The state offers a household renters credit to help taxpayers who meet income limits offset rental costs.

See the website for the Hawaii county of your choice to learn more about property taxes.

Hawaii Retirement Taxes

Social Security benefits are exempt. Military, government, and private pensions and employer-sponsored plans are 100% exempt from income tax if the employee made no contributions to the plan. If the employee contributed to the plan, such as a 401(k) with employer matching, only employer contributions are exempt.

Hawaii Estate and Inheritance Taxes

Hawaii’s estate tax rate ranges from 10% to 20% on estates above $5,500,000. Hawaii has no inheritance tax.

For further information, visit the Hawaii Department of Taxation.

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