Question: Do I need a GE license for selling things online, such as on eBay?
Answer: The general excise tax is imposed for the privilege of doing business in the state of Hawaii. Therefore, every person doing business in Hawaii must get a GET license and file the appropriate tax returns, regardless of how much income the business earns and whether or not the business also incurred losses.
Department of Taxation publication Tax Facts 96-1, General Excise vs. Sales Tax, is a great source of information for anyone who has a GET license or is about to apply for one. It clearly explains who is obligated to pay the GET and why, as well as other commonly asked questions such as whether a retailer can pass the GET on to the consumer.
To obtain a GET license, an individual would file Form BB-1 and pay a $20 registration fee with the Department of Taxation. Or, the BB-1 form may be completed online with Hawai‘i Business Express at https://hbe.ehawaii.gov/BizEx/home.eb.
Q: How do I know which type of business to set up, e.g., sole proprietorship, a corporation, an LLC — and what is the difference in naming my company (Inc., Co., Ltd., LLC, LP, etc.)?
A: The department has another publication — Tax Facts 97-3, Starting a Business — that addresses many of the questions an individual may have when thinking of starting a business. All of the department’s publications are available under the News and Publications tab on our website: hawaii.gov/tax.
Q: What if I just want to sell a few items online (via eBay, Craigslist, etc.) and don’t plan on making it a regular, income-generating activity?
A: “Business,” subject to GET, includes all activities engaged in or caused to be engaged in with the object of gain or economic benefit, direct or indirect. There is an exception for casual sales, however, which is an occasional or isolated sale of tangible personal property that is not sold in the usual course of a trade or business.
