Research Areas
Hawaii
The Facts on Hawaii's Tax Climate
Here are some basic facts on Hawaii's tax system and how it compares to other states:
Tax Freedom Day Arrives on April 6 in Hawaii
Tax Freedom Day is the day when Americans finally have earned enough money to pay off their total tax bill for the year. In 2011, Hawaii taxpayers work until April 6, six days earlier than national Tax Freedom Day, ranking them 30th highest in the nation. The Tax Freedom Days of neighboring states are: Washington, April 16 (ranked 5th nationally), Oregon, April 8 (ranked 23rd nationally) and California, April 16 (ranked 6th nationally).
Full study of Tax Freedom Day, nationwide and in each state
Hawaii's State and Local Tax Burden Below National Average
Hawaii's 2009 state and local tax burden of 9.6% of income is below the national average of 9.8%. Hawaii's tax burden has decreased overall from 10.0% (24th nationally) in 1977 to 9.6% (22nd nationally) in 2009. Taxpayers in the Aloha state pay $4,399 per capita in state and local taxes.
Hawaii's State-Local Tax Burden, 1977-present
Other States' State/Local Tax Burdens
Map of U.S. Showing all State's Burdens and Ranks
Historical Chart Comparing All States' State/Local Tax Burdens from 1977 to 2009
Hawaii's 2012 Business Tax Climate Ranks 35th
Hawaii ranks 35th in the Tax Foundation's State Business Tax Climate Index. The Index compares the states in five areas of taxation that impact business: corporate taxes; individual income taxes; sales taxes; unemployment insurance taxes; and taxes on property, including residential and commercial property. Neighboring states rank as follows: Washington (7th), Oregon (13th) and California (48th).
50-State Comparison of Business Tax Climates (data only)
2012 State Business Tax Climate Index, Ninth Edition (full study).
Hawaii's Individual Income Tax Highest in the Nation
Hawaii's personal income tax system consists of twelve brackets with a top rate of 11% kicking in at an income level of $200,000. This makes Hawaii's rate the highest in the nation. Hawaii's 2009 state-level individual income tax collections were $1,037 per person, which ranks 12th highest nationally.
50-State Table of Individual Income Tax Rates
50-State Table of State Individual Income Tax Collections
50-State Table of State and Local Individual Income Tax Collections Per Capita
Hawaii's Corporate Income Tax System
Hawaii's corporate tax structure consists of three brackets with an upper rate of 6.4% kicking in at $100,000 of corporate income. Among states levying corporate income taxes, Hawaii's top rate ranks 32nd highest nationally. In 2009, state-level corporate tax collections (excluding local taxes) were $61 per capita, which ranks 42nd nationally.
50-State Table of Corporate Income Tax Rates
50-State Table of State and Local Corporate Income Tax Collections Per Capita and Per Household
50-State Table of State Corporate Income Tax Collections Per Capita
Hawaii Sales and Excise Taxes
Hawaii levies a 4% general sales or use tax on consumers, which is below the national median of 5.85%. In 2007 combined state and local general and selective sales tax collections were $2,664 per person, which is the highest in the nation. Hawaii's gasoline tax stands at 44.4 cents per gallon, which ranks 7th highest nationally. However, the state's general sales tax is applied to purchases of gasoline, and municipalities are allowed to levy additional "local option" taxes on gasoline. Hawaii's cigarette tax stands at $2.80 per pack of twenty, which ranks 3rd highest nationally. The sales tax was adopted in 1935, the gasoline tax in 1932 and the cigarette tax in 1939.
50-state table of sales, cigarette, gas, beer, wine, and spirits tax rates.
50-State Table of State and Local General and Selective Sales Tax Collections Per Capita
Hawaii's Property Taxes Among Nation's Lowest
Hawaii's local governments collected $771.85 in property taxes per capita during fiscal year 2006, which is the latest year available from the Census Bureau. Hawaii is one of the 13 states that collect no state-level property taxes. The state’s per capita property tax collections in FY 2006 rank 39th nationally.
State property tax collections per capita by state
Federal Tax Burdens and Expenditures: Hawaii is a Beneficiary State
Hawaii taxpayers receive more federal funding per dollar of federal taxes paid than the average state. Per dollar of Federal tax collected in 2005, Hawaii citizens received approximately $1.44 in the way of federal spending. This ranks the state 12th highest nationally and represents a significant rise from 1995 when Hawaii received $1.26 per dollar of taxes in federal spending (ranking 15th highest). Neighboring states and the amount of federal spending they received per dollar of federal taxes paid were: Alaska ($1.84), Oregon ($0.93), Washington ($0.88) and California ($0.78).
Comparing the amount of federal taxes sent to Washington with the amount of federal spending coming back to the state
