A Guide To Filing LLC Taxes In Hawaii

In order to run an LLC or limited liability company in Hawaii, you will need to file and report certain tax-related documents for the state. So, in this article, we will cover exactly what you need to do so that your business fully taxes compliant once you’re operating in Hawaii.

Filing An Annual Report

You will be required to file a yearly report for your LLC in Hawaii. There are two options for filing this report and these include either through the mail or online (BREG). You don’t need to remember to do this since the state will actually send a reminder to your company. You will need to submit this report on the quarter of the month of your company’s yearly anniversary. So, if your company was formed on July 27th, you’ll need to file your annual report anywhere between July 1st to September 30th. There is a filing fee and it is quite affordable at only $15.

 

How To File LLC Taxes in Hawaii

State Business Tax

The individual LLC members are all responsible for paying state or federal taxes. The company itself is not responsible for paying these taxes, but the actual members. There are particular states where the LLC will need to pay taxes for doing business within the state, however, Hawaii does not have this additional tax.

With that said, there are many members of LLCs who prefer the company to be handled like a corporation when it comes to taxation. If you decide that you want to go this route, then you’ll need to fill out the IRS 2553 form which can be easily found on their website. If the LLC is being treated as a corporation, then the company will need to file its own tax return. Corporation income is taxed in Hawaii the same way that it is taxed in other states. The current corporate tax rate is between 4.4% to 6.4%. When the corporation pays this tax, they will need to pay it to Hawaii’s Department of Taxation.

Employer Tax

In the event that your company has employees, then you’ll also need to pay employer taxes. Employers will need to pay both the federal government and the state. In order to pay federal government taxes, you’ll need to get an EIN which is a federal employer identification number, and pay to the IRS.

In order to pay taxes to the state, you’ll need to register your LLC with DOT and then pay taxes to the Department of Taxation. After registering, you’ll have to file withholding taxes on a particular basis such as every month. This will need to be done through Forms HW-14 and VP-1. Reconciliation of your LLC’s withholding will need to be done by filling out and submitting form HW-3.

You will also likely be required to also pay UI or unemployment insurance taxes. You can do so through Hawaii’s Department of Labor and Industrial Relations. You can find and fill out these forms online. Registration can be done by filling out the BB-1 form. Then, you’ll need to fill out forms UC-B6/UC-B6A so that you can pay the unemployment insurance taxes and report on wages.

General Taxes

If your company actually sells products to people located in Hawaii, then it will be necessary for you to pay GET or general excise tax which is also more popularly known as sales tax. You will need to register this at the DOT and make payments on a periodic basis according to the actual goods that you’ve sold locally. In order to register to pay these taxes, you can do so online by filling out the BB-1 form. Once your registration is successful, you will receive a GET license. Your general excise tax returns will need to be periodically submitted to DOT.

Other States

If your business intends to sell products or services in other states besides Hawaii, then you will have to register your business in almost all of those states. Registration would depend on the laws of the particular states involved. In most cases, registration will be necessary if you have an employee or employees in that state, have a physical storefront, or are trying to actively get customers in that state through ads, etc.

Conclusion

In summary, we have just looked at a quick guide on the necessary taxes you’ll need to file if you intend on owning and operating an LLC in Hawaii. If you need more information, be sure to check out the official websites for the entities mentioned above.