Overview of Hawaiʻi's
Tax System

Taxes are the engine of our state government — funding the programs and services that we all benefit from.

In FY 2025

Hawaiʻi made over
$11.08 billion
from taxes.

Click on a pie slice or legend item to see detailed information about that tax category.

Hawaiʻi has many different kinds of taxes, including taxes on personal income, goods and services, and hotel rooms.

* Property is taxed at the county level

Taxes fund our communities.

Most of Hawai'i's $11.079 billion in tax revenue goes to the general fundThe general fund pays for most state operations and services, including education, healthcare, and public safety. and special fundsSpecial funds are dedicated to specific purposes, like highway maintenance or environmental programs.. This money supports the common goods our communities depend on, from healthcare and education to housing and food security.

Healthcare
$1.83 billion
Health coverage for 441,000 children and adults
Affordable Housing
$305+ million
Building affordable units, rental assistance, and homelessness programs
Public K-12 Schools
$1.76 billion
Education for 165,000+ students across 296 schools
Food Security
$30+ million
Free and reduced-price school meals for 78,000 students and SNAP administration for over 163,000 people

Besides taxes, the state government is funded by bonds (borrowed money) and federal dollars.

Learn more about the state budget

Wealthy people spend a
        smaller part of their income on taxes.

PERCENTAGE OF INCOME SPENT ON TAXES
An effective tax rate is the actual percentage of your total income that you pay in taxes, after accounting for all deductions, credits, and the progressive tax bracket system.
Tax Types:
GET
Property
Income

Why do lower-income families pay more?

The General Excise Tax (GET) is the main reason. Unlike income taxes that take a percentage of what you earn, GET is added to almost everything you buy—groceries, rent, utilities, even medical care.

Min. Wage Household

Annual Income

$58,240

GET Burden

1.42%

of income

High-Income Household

Annual Income

$200,000

GET Burden

0.41%

of income

Same tax, 3.5× the impact.

The tax rate is the same, but the impact is very different. Lower-income families must spend most of what they earn just to get by, so they end up paying a much larger share of their income in taxes.

Policy Priorities

The ultra-wealthy should pay their fair share

Three areas where Hawaiʻi can create a more equitable tax system and invest in our communities.

1

Income

Tax on Multi-Millionaires

Hawaiʻi has 1,800 people who earn more than $1 million a year. This group is not struggling to pay their bills or make ends meet, and they should be taxed at a higher rate than everyone else.

$71M+

per year from a 2% surcharge on income above $1 million

2

Investments

Tax Work Like Wealth

Income from investments should be taxed the same as income from regular work. Currently, Hawaiʻi allows capital gains to be taxed at a lower rate (7.25%) than ordinary income—a loophole that almost entirely benefits the rich.

79.4%

of capital gains income goes to the top 7.7% of earners ($400K+)

Closing this loophole would generate revenue for affordable housing, schools, and infrastructure while making the tax system more equitable.

3

Real Estate

Conveyance Tax Reform

The conveyance tax is a one-time tax paid when property is sold. Despite soaring luxury home values, expensive properties pay very low rates—only 0.5 to 1.25%.

$300–400M

annually if rates rise to 2–6% for homes worth $2M+

This revenue would fund affordable housing, homelessness programs, land conservation, and the Department of Hawaiian Homelands—while middle-class homeowners pay less.

Learn More About Our Tax Priorities

Read our full report
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