Hawaii Tax Guide 2025
Explore Hawaii's 2025 state tax rates for income, sales, property, retirement, and more. Learn how Hawaii compares nationwide.
Navigating the complexities of state taxes can be daunting, but understanding Hawaii's tax landscape is essential for residents and newcomers alike.
In this guide, we'll explore key components of The Aloha State's tax system, from income and sales taxes to property taxes and retirement benefits.
Hawaii state tax: Overview
Hawaii distinguishes itself with low property taxes, just 0.27% on average, ranking as the lowest in the U.S. Yet, buyers face some of the nation’s steepest home prices, with median values soaring above $760,000.
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When it comes to daily expenses, even groceries are taxed at 4% (and sometimes 4.5% with local surcharges) through the state’s General Excise Tax.
Income taxes also run high compared to other states, with the top bracket at 11%, but retirees can find relief since many pensions and Social Security benefits escape state tax.
Looking ahead, as Kiplinger has reported, Hawaii will launch a new “Green Fee” in 2026, adding to the current lodging taxes and bringing the total to 11% for hotel stays.
The proceeds will support environmental and climate initiatives, making Hawaii the first state to enact sustainable tourism funding.
[Data for this state tax guide was gathered from a number of sources including the Census Bureau, the state’s government website, the Sales Tax Handbook, and the Tax Foundation. Property taxes are cited as a rate percentage rather than the assessed value.]
Hawaii income tax
Hawaii has a graduated state individual income tax rate ranging from 1.4% to 11%, according to the Tax Foundation.
Hawaii retirement taxes
Hawaii exempts some retirement income, but income tax rates are on the high end for retirement income that is taxable. Hawaii also has an estate tax. The estate tax exemption is $5.49 million in Hawaii, and estates that exceed the exemption are taxed between 10% and 20%.
- Income Tax on Taxable Income: Low of 1.4% (on up to $4,800 for joint filers and $2,400 for single filers) and a high of 11%
- Social Security: Not taxable
- Pensions: Not taxable (as long as you don’t make contributions)
- 401(k) and IRA Distributions: Taxable
Hawaii sales tax
Hawaii has a state sales tax rate of 4%. Localities can add as much as 0.5%, but the average combined rate is only 4.5%, according to the Tax Foundation.
- Groceries: Taxable
- Prescription drugs: Taxable
- Clothing: Taxable
- Motor vehicles: Exempt
How much are property taxes in Hawaii?
In Hawaii, the average effective property tax rate is 0.32%, which is the lowest rate in the U.S.
Source: Tax Foundation
Hawaii Property Tax Breaks for Retirees
Honolulu Homestead Exemption: Property tax breaks for older adults vary by county in Hawaii.
For example, homeowners 65 or older get a larger home exemption of $160,000 (as opposed to $120,000 for younger homeowners) in Honolulu County.
Hawaii gas tax
Gasoline: $0.17 per gallon.
Diesel: $0.17 per gallon.
Source: Sales Tax Handbook
Hawaii taxes on alcohol and tobacco
Product | Tax Amount |
|---|---|
Cigarettes | $3.20 per pack |
Large Cigars | 50% of wholesale price |
Tobacco/Snuff | 70% of wholesale price |
Source: Sales Tax Handbook
Product | Tax Amount |
|---|---|
Wine | $1.38 per gallon |
Beer | $0.93 per gallon |
Liquor | $5.98 per gallon |
Source: Sales Tax Handbook
Hawaii estate and inheritance taxes
Hawaii imposes an estate tax on estates worth $5.49 million or more. So, if your estate is worth less than that amount, your estate won't be taxed by Hawaii.
For estates that are taxed, tax rates range from 10% to 20%.
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