Question: Recently I purchased a townhouse and I’m planning to rent it to my son. My accountant told me that I must get a general excise tax license. I’m wondering where do I go to get this license and what cost is involved? All of this is new to me. I guess I should have asked my accountant, but I didn’t want him to know that I was clueless.
Answer: Hawaii businesses pay GET on gross receipts for goods and services; landlords pay it for rent they receive because that is gross income.
You may apply for a GET license by mail, in person or online. The cost is $20, which is a one-time fee, according to the state Department of Taxation.
You would get it as part of the state of Hawaii’s Basic Business Application, known as the BB-1 Packet. Find a fillable PDF of the form at 808ne.ws/BB1 Opens in a new tab.
The form asks for the name and type of business, which could be as simple as a sole proprietorship; the tax type, which per your accountant’s advice would be GET/Use Tax because you’ll be a long-term landlord of a single unit; and other information.
After filling out and printing the form, mail it and the licensing fee to General Excise License Applications, P.O. Box 1425, Honolulu, HI 96806-1425.
If you prefer, you may pick up the form at any DOTAX district office statewide, or, for “one-stop” information about starting a business, visit one of the Department of Commerce and Consumer Affairs’ Business Action Centers.
On Oahu, the BAC is at 1130 N. Nimitz Highway, Suite A-220. Office hours are 7:45 a.m. to 4:30 p.m., Mondays through Fridays (except holidays). You may apply for the GET license, and have your questions answered in person. Note: the $20 fee must be paid by cash or check; no credit or debit cards accepted. Call 586-2545 or email bac@dcca.hawaii.gov for more information.
You may also apply for a GET license online. Go to hitax.hawaii.gov Opens in a new tab, click on “Register New Business” (under the “Services” header) and then click on “BB-1 Basic Business Application.”
Oahu landlords pay 4.5 percent GET on rent received; that includes the 4 percent statewide GET and the 0.5 percent Oahu surcharge (rail tax). Landlords may pass the tax to their tenants, as long as it’s clear in the rental agreement and doesn’t exceed 4.712 percent, according to DOTAX.
Q: Why can the landlord charge 4.712 percent, if they’re only paying 4.5 percent?
A: To cover their entire GET expense; businesses are taxed on gross receipts, including the GET charged to customers, DOTAX explains. To be clear, this is true of any Oahu business paying 4.5 percent GET, not only landlords.
For example, if the sales price of an item on Oahu is $100, the maximum GET is $4.71, bringing the purchase price to $104.71.
For more information about Hawaii’s general excise tax, see tax.hawaii.gov/geninfo/get/ Opens in a new tab.
Q: Will TheBus give free rides to Punchbowl for Memorial Day?
A: No. TheBus routes will run from 7 a.m. to 8 a.m. from Alapai Station to the National Memorial Cemetery of the Pacific (“Punchbowl”), but regular fares and use of bus passes will apply, according to a news release from the city. Monday’s ceremony, which is free and open to the public, is scheduled to start promptly at 8:30 a.m.
Auwe
A group of what looked like sixth-grade boys walked down East Manoa Road at 1:50 p.m. on Tuesday. As I was driving past them, one of them jumped off the curb and pretended to run in front of my car. I slammed on the brakes. If there had been a car behind me, there would have been an accident. One of the other kids knocked him on the head and they laughed. Not funny, guys. — A reader
Write to “Kokua Line” at Honolulu Star-Advertiser, 7 Waterfront Plaza, Suite 210, 500 Ala Moana Blvd., Honolulu 96813; call 529-4773; fax 529-4750; or email kokualine@staradvertiser.com.
