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Official Tax Guide

Hawaii Taxes 2025: Income, Sales, and Property Tax Guide

Complete guide to Hawaii state taxes. Income tax (1.4% - 11%), sales tax, and what you need to know before moving.

Updated January 15, 2026
5 min read

State Tax Guide 2025: Hawaii

Moving to Hawaii offers an incredible lifestyle, but understanding the tax landscape is crucial for your financial planning. Hawaii’s tax structure differs significantly from the U.S. mainland, with a unique mix of high income taxes, moderate sales taxes, and specific property tax rules.

This guide provides an overview of Hawaii's tax system for the 2025 tax year.

1. Income Tax

Hawaii operates under a progressive income tax system. This means that as your income increases, your tax rate also increases. It is not a flat tax.

For the 2025 tax year, Hawaii’s income tax rates range from 1.4% to 11%, applied to Hawaii taxable income. The specific rate you pay depends on your filing status (Single, Married Filing Jointly, etc.) and your income bracket.

Key Characteristics:

  • Progressive Structure: The state uses multiple tax brackets.
  • Top Rate: Hawaii has one of the higher top marginal tax rates in the U.S. (11%), which applies to high-income earners.
  • Standard Deduction: Hawaii allows for a standard deduction, which lowers your taxable income. (Note: The specific amounts for 2025 should be verified with the Hawaii Department of Taxation, as they are subject to annual adjustment).

Estimated Tax Brackets (General Range):

  • Lower Income: Taxed at rates starting around 1.4%.
  • Middle Income: Rates gradually increase through brackets of 3.2%, 5.4%, 6.4%, 7.2%, 7.6%, 7.9%, 8.25%, 8.75%, 9%, 10%, and finally 11%.
  • Higher Income: The 11% rate generally applies to income exceeding roughly $200,000 (depending on filing status), though exact threshold figures for 2025 should be confirmed with official state resources.

2. Sales Tax

Hawaii’s sales tax is often a point of confusion because it is structured differently than in most other states.

  • State General Excise Tax (GET): The state rate is 4%.
  • County Surcharges: In addition to the 4% state rate, counties (Oahu, Maui, Kauai, and Hawaii Island) may add a surcharge. This typically brings the total sales tax rate to 4.5% or 4.7125% depending on the county.
  • Service Tax: Unlike many states that only tax goods, Hawaii’s GET applies to almost all business activities, including services. This cost is often passed on to consumers, effectively acting as a sales tax on services as well as goods.

Comparison to Mainland:
While the rate seems lower than states like California or New York (which can exceed 8-9%), Hawaii's tax applies to a broader base, including services, which can make the overall tax burden feel comparable.

3. Property Tax

Property taxes in Hawaii are administered at the county level, not the state level. Rates and assessments vary by island and county.

General Overview:

  • Tax Rates: Hawaii property tax rates are generally lower than the national average. However, Hawaii has some of the highest property values in the country, which can result in a significant annual tax bill despite lower rates.
  • Owner-Occupied Rate: If you designate a home as your primary residence (Owner-Occupied), you qualify for a significantly lower tax rate compared to vacation homes or investment properties.
  • Assessment: Property taxes are based on the assessed value of the property. Hawaii caps annual increases in assessed value for owner-occupied homes to help stabilize costs for residents.

Estimated Range:

  • Owner-Occupied: Rates often range roughly from $2.00 to $4.00 per $1,000 of assessed value.
  • Non-Owner-Occupied: Rates can be significantly higher, often ranging from $5.00 to $10.50+ per $1,000 of assessed value.

4. Other Taxes

When budgeting for life in Hawaii, consider these additional tax categories:

  • Gasoline Tax: Hawaii taxes gasoline at a fixed rate per gallon. As of 2025, this remains one of the lower gas taxes in the nation (approx. $0.10–$0.19 per gallon), though fuel prices at the pump are generally higher due to shipping costs.
  • "Sin" Taxes:
    • Alcohol: Hawaii taxes beer, wine, and spirits. The excise tax on liquor is distinct from the GET.
    • Tobacco/Nicotine: Cigarettes and other tobacco products are subject to excise taxes, which are among the higher rates in the U.S.
  • Inheritance/Estate Tax: Hawaii does have an estate tax, which is levied on the transfer of assets after death. However, Hawaii does not have an inheritance tax (tax paid by the recipient). The estate tax exemption aligns with the federal levels, but the top tax rate can be steep for large estates. This is a critical area for estate planning.

5. Retiree Taxes

For retirees moving to Hawaii, the tax treatment of retirement income is a key consideration.

  • Social Security: Social Security benefits are not taxed by the state of Hawaii.
  • Pensions and Retirement Accounts: Distributions from private pensions, 401(k)s, and IRAs are generally taxable as ordinary income under the progressive tax brackets (1.4% - 11%).
  • Public Pensions: Some specific government pensions may have different tax treatments, but generally, they are taxable.
  • Property Tax Relief: Hawaii offers a property tax credit for homeowners with lower incomes (specifically those age 60+ or with a disability), which can significantly reduce the property tax burden for qualifying retirees.

6. Comparison to Neighbors

How does Hawaii compare to other states in the Pacific region?

  • California: Hawaii has a lower top income tax rate (11%) compared to California (13.3%+). However, Hawaii’s sales tax base is broader (applying to services), and property values are generally higher in Hawaii than in many parts of California.
  • Washington: Washington has no state income tax, making it more attractive for high earners. However, Washington has a high sales tax (over 6-10% depending on location). Hawaii offers a middle ground with moderate sales taxes but significant income taxes.
  • Alaska: Alaska has no income tax and no state sales tax (though localities may tax). Hawaii is significantly more expensive tax-wise compared to Alaska.

Summary: Hawaii is generally tax-moderate to high compared to the national average, driven primarily by the progressive income tax and the unique General Excise Tax on services.

Disclaimer

Tax laws change frequently and are subject to individual circumstances. The rates and figures provided in this guide are based on 2025 estimates and general rules but may vary by county or change due to legislative updates. This guide is for informational purposes only and does not constitute legal or financial advice. Consult a Certified Public Accountant (CPA) or tax professional before making financial decisions.