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Set up and use the Hawaii General Excise Tax (GET)

The General Excise Tax (GET) is a tax imposed on business activity in Hawaii. This tax is often called  “gross income tax” because the tax is computed on the business’ total gross income derived from doing business in Hawaii and not on the business’ net profit. The GET is used instead of sales tax in the state of Hawaii. It is calculated at a percentage on invoices, but is included as income on the Profit and Loss Report. A different percentage may be calculated on the total income (including the GET) for the amount to pay the state.

Example: On the invoice the percent is 4.167%, but when paying the state it is calculated at 4% of the total income.

 

Because the general excise tax is imposed on you (the business) rather than on your customer, you may include the tax in the price you charge your customer in the same way that you include your other costs of doing business.

You are not required to visibly pass on the tax to your customer as an additional itemized charge, but you may do so if you choose. The itemized amount is usually represented as a percentage of a basic price. Any additional amount charged, however, is part of the total sales price and, as such, is included in the total gross income subject to the general excise tax.

If you itemize the general excise tax as an additional charge, be sure your customer knows the exact dollar amount or percentage that will be added ahead of time and agrees to pay it. In addition, consumer protection laws do not allow you to visibly pass on an amount that is more than the actual general excise tax due on the transaction.

Detailed Instructions

Because QuickBooks Desktop does not report sales tax as income it is necessary to set up and use this tax differently.

Step 1: Set up the General Excise Tax (GET)


  1. Turn Sales Tax tracking off if it has already been enabled.
  2. Create a GET item by:
    1. From the Lists menu choose Item List.
    2. Click Item at the bottom of the list and then choose New .
    3. Select Other Charge.
    4. Enter a name that describes the tax (ex. GET).
    5. Enter a description that will appear on sales forms.
    6. Enter an amount as a percentage to be used on the invoice.
    7. Select an account for tracking this income.
    8. Click OK to close the window or Next to create a Subtotal item.

Quick Tip
If you also invoice other wholesalers or collect commissions on insurance sales you will need to create separate Other Charge items for each GET rate.


Step 2: Use the General Excise Tax (GET)on a sales form


  1. Create your invoice or sales receipt entering all services and items as you normally do.
  2. Enter a Subtotal item.
    Note:
    Because QuickBooks Desktop calculates percentages only on the line above, you must subtotal the items before entering the GET item that calculates on a percentage basis.
  3. Enter the GET item.
  4. Save the invoice or sales receipt.

Step 3: Run reports to view and pay the General Excise Tax


  1. Run a Profit and Loss Report for the reporting period. The report will include the GET collected from customers.
  2. File your General Excise/Use Tax Return (Form G-45) and pay taxes monthly, quarterly, or semiannually, as appropriate.
  3. Multiply Total Income by the correct tax rate(s) and then write your check.

KB ID# HOW12728
12/8/2016 12:03:19 PM
QYPPRDQBKSWS05 9138 Pro 2017 38afd5