What Small Businesses in Hawaii Need to Know About Taxes in 2023

Small businesses in Hawaii need to be aware of the changes that will occur in the tax landscape in 2023. As the year approaches, it is important for business owners to understand how these changes will affect their operations and plan accordingly.

Failure to do so can result in unnecessary expenses and potential legal issues. One of the most significant changes affecting small businesses is the increase in Hawaii’s general excise tax (GET) rate from 4% to 4.5%.

This increase will impact all businesses that are subject to GET, including those engaged in retail sales, services, and wholesale transactions. Additionally, there are several other tax-related updates that small business owners should be aware of, such as changes to income tax rates and deductions, minimum wage laws, and new filing requirements for certain types of businesses.

By staying informed about these changes, small business owners can take proactive steps to minimize their tax liabilities and avoid costly mistakes come tax season in 2023.

When considering tax obligations in 2023, small businesses in Hawaii should also pay attention to the legal requirements that come with starting a business, such as LLC registration hawaii.

As small businesses in Hawaii plan ahead for 2023, it is crucial to understand various tax obligations. One important aspect to consider is the LLC registration process in Hawaii, as the state’s requirements and regulations can significantly impact a company’s tax status and financial obligations.

Did you know that LLC registration in Hawaii has important implications for small businesses come tax season in 2023? It is crucial for entrepreneurs to understand the specific tax requirements and benefits associated with this type of business structure.

In order to navigate the intricacies of tax policies in 2023, small businesses in Hawaii should seek the expertise of top hawaii LLC service providers. These specialists can offer proficient advice on tax planning and ensure businesses stay compliant with the ever-evolving regulations.

As we look towards 2023, it’s essential for small businesses in Hawaii to stay informed about their financial obligations, including hawaii small business taxes. Understanding the unique tax landscape in the Aloha State will empower these local ventures to navigate the fiscal year with confidence and ensure compliance with relevant regulations.

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Hawaii’s General Excise Tax (Get) Increase

Hawaii’s General Excise Tax (GET) is expected to increase in 2023, leaving small businesses with a new set of obligations.

The state has passed a law that will gradually raise the GET rate from 4% to 4.5%, beginning on January 1, 2023.

This means that businesses will need to prepare for a higher tax burden and understand how it will affect their bottom line.

One of the challenges that small businesses may face is navigating the tax exemptions available under Hawaii law.

For example, while some businesses in the tourist industry may be exempt from GET on certain transactions, others may not qualify for these exemptions.

It is crucial for small business owners to consult with tax professionals and stay up-to-date on any changes to Hawaii’s tax laws, particularly as they relate to their specific industries.

Failure to comply with these regulations could result in penalties and fines that could significantly impact their operations.

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Impact Of Get On Retail Sales, Services, And Wholesale Transactions

The General Excise Tax (GET) is a state tax that applies to all businesses operating in Hawaii. In 2023, small businesses need to be aware of the impact of GET on their retail sales, services, and wholesale transactions.

Small businesses can qualify for various exemptions, including the low-income household renters’ exemption and the food/excise tax exemption. It is essential for small business owners to review their eligibility for these exemptions as they can significantly reduce their tax liability. However, with GET enforcement becoming stricter in recent years, small businesses must ensure that they are compliant with GET rules and regulations to avoid penalties and fines.

In addition, it is crucial to note that GET applies not only to retail sales but also to services and wholesale transactions. Small businesses providing services such as consulting or landscaping must collect GET from their clients. Those involved in wholesaling activities need to pay GET on their gross income received from wholesalers or retailers.

Overall, understanding the impact of GET on different types of transactions and complying with the regulations will help small businesses stay financially healthy in 2023.

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Changes To Income Tax Rates And Deductions

Let’s start by discussing updates to tax brackets. What should small businesses in Hawaii be aware of when it comes to their taxes in 2023?

Next, let’s talk about the increased deductions for small businesses. What can Hawaii small businesses expect from the new changes?

Finally, we should touch on the tax credits available to Hawaii businesses. What opportunities are available for businesses to save money on their taxes?

Updates To Tax Brackets

Are you tired of feeling like your small business is getting the short end of the stick when it comes to taxes?

Well, there’s some good news for 2023. The IRS has made adjustments to tax brackets to reflect inflation calculations, meaning that you may have a higher income threshold before entering a higher tax bracket.

This can potentially result in lower taxes and more money for your business.

Keep an eye out for any updates or changes to these brackets as the year progresses.

Increased Deductions For Small Businesses

Now that we’ve talked about the adjustments to tax brackets, let’s move on to another change that can benefit small businesses: increased deductions.

Qualifying expenses are now more substantial for small businesses, which means you can claim more tax credits and potentially reduce your taxable income even further.

However, navigating IRS forms can be a daunting task for many entrepreneurs. Don’t worry; there are resources available to help you maximize your deductions and avoid any costly mistakes.

Keep in mind that staying up-to-date with tax changes and utilizing all available deductions is crucial for the financial success of your business.

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Tax Credits For Hawaii Businesses

Now that we’ve covered the increased deductions for small businesses, let’s shift our focus to tax credit eligibility for Hawaii businesses.

Hawaii offers several tax credits to businesses that can help reduce their state income tax liability.

To qualify for these credits, businesses must meet certain criteria and go through the tax credit application process.

The available tax credits include the High Technology Business Investment Tax Credit, the Motion Picture, Digital Media and Film Production Income Tax Credit, and the Renewable Energy Technologies Income Tax Credit.

As a business owner in Hawaii, it’s beneficial to explore these options and take advantage of any eligible tax credits to maximize your savings come tax season.

Minimum Wage Laws Updates

As we’ve discussed in the previous section, there are some changes to income tax rates and deductions that small businesses in Hawaii need to be aware of in 2023. However, it’s not just taxes that can impact your business. Another important factor is minimum wage laws.

Starting January 1, 2023, the minimum wage in Hawaii will increase from $10.10 per hour to $12.00 per hour. This change will certainly have an impact on employment for small businesses across the state.

While some employers may need to cut back on hours or staff to accommodate the new wage requirements, others may choose to raise their prices or find other ways to offset the increased costs. It’s important for small business owners to carefully consider how this change will affect their bottom line and plan accordingly.

Additionally, it’s worth noting that changes in minimum wage laws can have ripple effects throughout the economy, so it’s important to stay up-to-date on any economic effects that may arise as a result of this update.

New Filing Requirements For Certain Types Of Businesses

As a small business owner, you may be feeling overwhelmed by the constant changes in tax laws and regulations. However, it is crucial to stay informed about the new filing requirements for certain types of businesses that will go into effect in 2023.

If your small business has taxable income of $100,000 or more for the previous year, you will now be required to file your tax return electronically.

Additionally, reporting deadlines have been pushed forward by one month for all businesses with taxable income over $150,000.

These changes can have significant tax implications for your small business structure and may require additional planning and preparation to ensure compliance with the new requirements.

It is important to work closely with a tax professional who can help you navigate these changes and ensure that your small business is prepared for the new filing requirements.

By staying informed about these developments, you can avoid potential penalties and fines while also maximizing your tax benefits and minimizing any tax liabilities.


In conclusion, as a small business owner in Hawaii, it is important to stay up-to-date with the changes in tax laws that will take effect in 2023.

The increase in the General Excise Tax will have an impact on retail sales, services, and wholesale transactions. Therefore, it is crucial to plan accordingly and adjust prices or budgets to account for this change.

Additionally, changes to income tax rates and deductions may affect how much you owe or receive back during tax season.

If you have employees, be sure to stay informed about updates to minimum wage laws.

By staying informed of these changes and seeking professional guidance when needed, small businesses can navigate the shifting tax landscape in Hawaii with confidence.

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