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.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
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%.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.
-
3 Ways to Stretch the 2026 Social Security COLA For Your BudgetThree steps retirees can take to stretch the Social Security COLA to fit their budgets.
-
How to Keep Your Charitable Giving Momentum Going All YearInstead of treating charity like a year-end rush for tax breaks, consider using smart tools like DAFs and recurring grants for maximum impact all the year.
-
Uber Takes Aim at the Bottom Lines of Billboard LawyersUber has filed lawsuits and proposed a ballot initiative, in California, to curb settlements it claims are falsely inflated by some personal injury lawyers.
-
How Are I Bonds Taxed? 8 Common Situations to KnowBonds Series I U.S. savings bonds are a popular investment, but the federal income tax consequences are anything but straightforward.
-
New 2026 Tax Change Could Mean More for Your IRA and 401(k) SavingsRetirement Savings Here's how the new IRS inflation adjustments will increase the contribution limits for your 401(k) and IRA in the new year.
-
Capital Gains Tax Quiz: How Well Do You Really Know IRS Investment Tax Rules?Quiz Take our capital gains tax quiz to test your investment taxes knowledge. Learn about loss rules, holding periods, and tax incentives that could impact your savings.
-
6 Tax Reasons to Convert Your IRA to a Roth (and When You Shouldn't)Retirement Taxes Here’s how converting your traditional retirement account to a Roth IRA can boost your nest egg — but avoid these costly scenarios.
-
Could Tax Savings Make a 50-Year Mortgage Worth It?Buying a Home The 50-year mortgage proposal by Trump aims to address the housing affordability crisis with lower monthly mortgage payments. But what does that mean for your taxes?
-
3 Ways High-Income Earners Can Maximize Their Charitable Donations in 2025Tax Deductions New charitable giving tax rules will soon lower your deduction for donations to charity — here’s what you should do now.
-
Another State Bans Capital Gains Taxes: Will More Follow in 2026?Capital Gains A constitutional amendment blocking future taxes on realized and unrealized capital could raise interesting questions for other states.
-
An HSA Sounds Great for Taxes: Here’s Why It Might Not Be Right for YouHealth Savings Even with the promise of ‘triple tax benefits,’ a health savings account might not be the best health plan option for everyone.