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Hawaii State Tax Updates

For the latest news and updates on Hawaii state and local tax

August 26, 2021

Hawaii – Excise Tax Treatment of Software

The Hawaii Department of Taxation provided additional guidance about the general excise tax (GET) and the treatment of software sales. The sale of canned or prewritten software is considered a sale of tangible personal property. Software provided as a license to use software is also taxable as it is treated as a sale of tangible personal property. However, the sale of custom software has been deemed a provision of a service.

The sale of tangible personal property or services is subject to Hawaii’s GET retail rate of 4%. Still, a wholesaler of tangible personal property or services is subject to GET at the wholesale rate of 0.5%.

If software is sold or licensed by a marketplace facilitator, then the marketplace facilitator is the seller of record and subject to the GET retail rate of 4%. The marketplace seller is considered to have made a sale at wholesale. (Hawaii Tax Information Release No. 2021-06.)

March 30, 2021

Hawaii Update on Extension of Filing Deadline

The Hawaii Department of Taxation is not extending the state’s tax year 2020 filing deadline. Taxpayers must file their returns by April 20, 2021. While taxpayers are required to file by April 20, they are granted an automatic 6-month extension to file the return through October 20, 2021 if one of these two conditions is met: (1) the taxpayer is due a refund; or (2) the taxpayer pays the properly estimated tax amount owed by April 20, 2021. Taxpayers who are not able to pay the properly estimated tax amount owed should pay as much as they can to avoid additional interest and penalties. No form is required to request the extension. (Hawaii Filing Deadline to Remain April 20, 2021, Haw. Dept. of Taxation, 03/24/2021.)

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