County Surcharge on General Excise and Use Tax

County Surcharge information for 2019

Table of Maximum General Excise Tax Pass-On Rates (PDF) Updated September 2019

The Legislature authorized the counties to adopt a surcharge on the general excise tax and use tax by ordinance at a rate of no greater than 0.5%. The following counties have adopted the surcharge:

City and County of Honolulu: The county surcharge at the rate of 0.5% is effective from January 1, 2007 to December 31, 2030.
County of Kauai: The county surcharge at the rate of 0.5% is effective from January 1, 2019 to December 31, 2030.
County of Hawaii: The county surcharge at the rate of 0.25% is effective from January 1, 2019 to December 31, 2019, and at the rate of 0.5% from January 1, 2020 – December 31, 2030.

The county surcharge is only added to activities taxed at the 4.0% rate. The county surcharge does not apply to activities taxed at the 0.5% rate (e.g., wholesaling) or the 0.15% rate (i.e., insurance commissions).

The county surcharge is computed and reported on Forms G-45 and G-49. Taxpayers who do business in more than one county must also complete Form G-75 and attach it to Forms G-45 and G-49.

Maximum Pass-On Rates

Businesses may choose to pass on the GE tax and any applicable county surcharge to its customers but is not required to do so. If the business passes on its tax, the maximum pass-on rates, which include the county surcharge if applicable, are as follows:

City and County of Honolulu: 4.7120% (effective January 1, 2007 – December 31, 2030)
County of Hawaii: 4.4386% (effective January 1, 2019 – December 31, 2019) and 4.7120% (effective January 1, 2020 – December 31, 2030)
County of Kauai: 4.7120% (effective January 1, 2019 – December 31, 2030)
County of Maui: 4.1666% (no county surcharge)

Sourcing Rules

Taxpayers are required to allocate their gross proceeds and gross income to the designated taxation districts pursuant to sections 18-237-8.6-01 to 18-237-8.6-10, Hawaii Administrative Rules. See Adopted rules relating to sourcing intangible property – effective April 20, 2019

Contracts Entered Prior to June 30, 2018

The new county surcharge for Kauai and Hawaii county shall not be imposed for gross proceeds or gross income covered under written contracts if the gross proceeds or gross income are received as payments beginning in 2019, the contract was entered into before June 30, 2018 and the written contract does not provide for the passing of increased taxes.
(See Section 237-8.6(c), Hawaii Revised Statutes.)

Department of Taxation