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.]
Sign up for Kiplinger’s Free E-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.
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%.
Related Content
-
How to Organize Your Financial Life (and Paperwork)To simplify the future for yourself and your heirs, put a financial contingency plan in place. The peace of mind you'll get is well worth the effort.
-
Financial Confidence? It's Just Good Planning, Boomers SayBaby Boomers may have hit the jackpot money-wise, but many attribute their wealth to financial planning and professional advice rather than good timing.
-
IRS Free File Is Now Open for 2025: Are Your Taxes Eligible?Tax Filing Official tax season doesn't begin until late January, but taxpayers can start filing free online returns now.
-
California Fires: How to Recover Tax Records and Other Important DocumentsDisaster Recovery Having your tax records and other vital documents is important for claiming casualty loss deductions that can help with recovery.
-
Child and Dependent Care Credit: How Much Is It?CDCTC The non-refundable tax break can help working families afford quality care for their child or qualifying dependent.
-
Gov. Hochul Wants to Triple the New York Child Tax CreditState Tax Millions of New York families could get a larger state child tax credit check over the next two years under a new proposal.
-
U.S. Consumers May Feel Pinch From Panama Canal Tariff HikeTax Policy The Panama Canal tariffs on crossing ships will add to looming price hikes for U.S. consumers as Trump threatens to take control of the historic waterway.
-
The American Opportunity Tax Credit (AOTC): How Much Is It Worth?Tax Credits This tax break can help you offset $2,500 in qualifying expenses tied to your higher education. Here's what you need to know.
-
Does Your State Have a Child and Dependent Care Tax Credit?
Child and Dependent Care Tax Credit Over two dozen states, plus the District of Columbia offer tax credits or deductions for working families.
-
Should Rent Be Part of Your Retirement Plans?Retirement Taxes Retiree renters may qualify for potential tax savings. Are you considering a move?
