If your business sells to customers in Hawaii, you may be required to collect and remit sales tax—even if you're not physically located there. This guide covers when you’re considered to have nexus in Hawaii, the registration process, and how to stay compliant.
🔍 What is Sales Tax Nexus?
Sales tax nexus is the level of connection between a business and a state that legally requires the business to collect and remit sales tax on sales made to customers in that state.
There are two primary types of nexus:
Physical Nexus: This occurs when a business has a physical presence in a state — such as an office, warehouse, retail location, inventory, or employees. Even a remote employee or temporary sales rep can trigger physical nexus in some states.
Economic Nexus: Introduced after the 2018 South Dakota v. Wayfair decision, economic nexus is based on sales activity alone — typically measured by the dollar amount of sales or number of transactions into a state, regardless of physical presence.
Once a business has nexus in a state, it must register with the state’s tax agency, collect the correct amount of sales tax on taxable transactions, and file regular returns.
🧾 Does Hawaii have economic nexus rules?
Yes. As of Jul 1, 2018, Hawaii enforces economic nexus laws requiring out-of-state sellers to collect and remit sales tax if they exceed the defined thresholds.
📊 What are the economic nexus thresholds in Hawaii?
You must register and collect sales tax in Hawaii if, during the Current or Previous Calendar Year, your business meets the following thresholds:
- Sales Threshold: $100,000
- Transaction Threshold: 200 transactions
Meeting either the sales or transaction threshold triggers nexus.
🏬 Are marketplace sales excluded from the economic threshold in Hawaii?
🚫 No, sales made through a marketplace facilitator are included in the threshold calculation in Hawaii.
A marketplace facilitator is a third-party platform — like Amazon, Etsy, Walmart Marketplace, or eBay — that enables sellers to list and sell their products. In Hawaii, even if a marketplace collects tax on your behalf, those sales are still counted toward your economic nexus threshold.
However, if you make direct sales (e.g., via your own website) to customers in Hawaii, those are always considered when determining whether you've triggered nexus.
🔁 Are wholesale or resale transactions excluded from the economic threshold in Hawaii?
🚫 No, resale or wholesale transactions are included in the economic threshold in Hawaii.
Resale transactions occur when you sell goods to another business that intends to resell them, often under a resale certificate. Some states exclude these sales when calculating economic nexus because the end buyer is expected to handle the tax obligation.
In Hawaii, resale and wholesale transactions are included in the nexus threshold even if they are exempt from tax. Be sure to track these sales when determining compliance obligations.
🚫💵 Are non-taxable or exempt sales excluded from the economic threshold in Hawaii?
🚫 No, non-taxable sales are included in the nexus threshold in Hawaii.
Non-taxable sales include transactions involving exempt products or exempt buyers (like nonprofits, government entities, or resale scenarios). Even though no tax is collected, some states still count these sales toward the economic nexus threshold.
In Hawaii, non-taxable sales are counted toward the economic nexus threshold. That means even exempt transactions can trigger a registration requirement if you cross the total sales or transaction limits.
🏢 What types of physical presence trigger sales tax nexus in Hawaii?
You have a physical nexus in Hawaii if your business has any of the following in the state:
- A business office, storefront, or retail location
- A warehouse or fulfillment center storing inventory or goods
- Temporary or permanent employees working in sales including pre or post sales
- Temporary or permanent employees working in marketing
- Temporary or permanent employees working in support/servicing
- Agent, representive, freelancer, contract worker, independent consultant or gig worker working in sales
- Agent, representive, freelancer, contract worker, independent consultant or gig worker working in marketing
- Agent, representive, freelancer, contract worker, independent consultant or gig worker working in support/servicing
Even if your business is not based in Hawaii, any of the above may create a tax obligation.
📝 How do I register for sales tax in Hawaii?
Once you meet either the economic nexus or physical nexus threshold, you must:
- Register for a Hawaii sales tax certificate at the Hawaii Tax Online Portal Portal
- Start collecting sales tax on all taxable sales shipped to Hawaii customers
- File returns and remit collected taxes on the assigned schedule
📅 How often do I need to file returns in Hawaii?
Hawaii assigns a filing frequency (monthly, quarterly, annually, others) based on your taxable sales volume. This will be confirmed during the registration process.
🧭 What’s the easiest way to track sales tax nexus and stay compliant in Hawaii and other states?
Tracking sales tax nexus across multiple states can be time-consuming and error-prone, especially as economic and physical nexus rules vary by state and change frequently. Businesses often struggle to know when they’ve triggered nexus in a new state, what steps to take next, and how much they may owe.
The Galvix Nexus Tracker solves this problem by automatically monitoring your sales activity and compliance risk in Hawaii and all other U.S. states.
By connecting directly to platforms like QuickBooks Online, Stripe, Shopify, NetSuite and others, Galvix analyzes your transaction data and compares it against each state’s nexus thresholds. It identifies where you may have established nexus — or are getting close — and alerts you in time to take action.
You’ll get:
- Automated alerts when nexus thresholds are approached or exceeded
- Detailed reports showing why and when nexus was triggered
- Estimated tax liability exposure for states where registration is overdue
Looking to simplify nexus tracking and sales tax compliance? Contact Galvix to see how we can help you stay ahead of your obligations.
This page is updated regularly. For official guidance, visit the Hawaii Tax Online Portal website.