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.
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.
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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
Social Security retirement benefits, military and government pensions, private pensions, and Tier 1 Railroad Retirement benefits are tax-exempt.
(Employee contributions to 401(k) plans or other retirement plans may be taxed in Hawaii. Employer contributions are tax-exempt.)
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
How much are property taxes in Hawaii?
In Hawaii, the average effective property tax rate is 0.26%, 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
Hawaii tobacco taxes
Product | Tax Amount |
|---|---|
Cigarettes | $3.20 per pack |
Large Cigars | 50% of wholesale price |
Tobacco/Snuff | 70% of wholesale price |
Source: Sales Tax Handbook
Hawaii alcohol taxes
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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