Hawaii state tax: overview
Hawaii has the lowest property tax rate in the nation, but generally high home prices. Groceries are taxed at the full rate in Hawaii, and the highest income tax bracket is 11%.
Retirees may get a break from paying state income taxes since some retirement benefits are tax-exempt.
[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.]
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Hawaii income tax
Hawaii has a graduated state individual income tax rate ranging from 1.4% to 11%, according to the Tax Foundation.
Hawaii Tax on Retirement Benefits: 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 seniors 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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