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Hawaii may approve Internet sales tax measure

updated 03:35 pm EDT, Fri May 8, 2009

Hawaii Internet tax law

Legislation that would require Hawaii-based online vendors to collect a 4 percent general excise tax on purchases placed from all other states is currently going through the system and may become law. According to a Friday report, the legislation is meant to standardize parts of Hawaii's tax code and simplify tax rates, joining an ongoing national effort towards similar goals.

Hawaii-based companies that sell products over the Internet are not currently required to collect state sales or excise taxes on purchased if they do not have a physical storefront in the buyer's state. Despite this, over 1,100 retailers are voluntarily collecting sales taxes on items shipping to the 22 participating states. If the legislation passes to become law, all Hawaii-based Internet vendors will be required to collect sales tax on shipped items.

New York has tried for a similar approach more than once but has rejected these plans, with some arguing that taxing out-of-state sales would only damage state revenue further by discouraging companies from basing themselves the same area.

by MacNN Staff




  1. malax

    Joined: Dec 1969



    That's odd. Perhaps I'm wrong, but it seems like this would disadvantage Hawaiian companies while providing no additional tax revenue to Hawaii.

    If I buy something from a Hawaii-based Web site, they would collect Virginia taxes and remit that to Virginia.

    If I buy the same thing from a Texas-based Web site (or overseas), I would dodge the Virginia tax.

    What's in this for Hawaii? Who lobbied in favor of this?

  1. malax

    Joined: Dec 1969



    Maybe I wouldn't be paying Virginia taxes at all. Hawaii would tack on 4% and keep it. That would kinda suck.

  1. Bobfozz

    Joined: Dec 1969


    states are losing

    lots of revenue for the so-called services we get.
    It's killing off retail which is what we need when we can't get it anywhere else.
    The internet is NOTHING more than mail order, which has been around for a long time. The only difference? Order it through your computer.

  1. danviento

    Joined: Dec 1969


    You're missing it

    THis is saying that anyone living IN Hawaii and ordering from out-of-state would have the ta applied to the purchase. Since residents live on islands 1000s of miles from the mainland, that means just about anything you can't find at the local 150% markup store, you get hit with this tax on.

    Call me crazy, but it would seem a little harder than usual to "vote with your feet" and move out thanks to moving expenses associated with flying you c*** out along with your stuff.

    Yet one more reason that vacationing or living in Hawaii, aside from the bums with no money and the seriously rich, is for suckers.

  1. testudo

    Joined: Dec 1969


    Re: missing it

    So you're whining because of a 4% tax on merchandise your not buying at 150% markup? Call me crazy, but seems like a small price to pay.

    And I'm sure the local hawaiians wouldn't mind if all those people left and gave them back their islands.

  1. testudo

    Joined: Dec 1969


    Re: missing it

    Just rehashing my comments after reading the link.

    First off, these taxes are SUPPOSED to be paid anyway. Just because you aren't paying them doesn't mean you aren't supposed to.

    Secondly, the tax is taken by the lots of Amazon or NewEgg or whoever, and sends it back to Hawaii.

    Thirdly, it is voluntary at the moment. All the e-tailers have complained for years that they would collect taxes, but the myriad of state, county, and city tax rates are so screwed up, they have no chance of getting it right. So they've said "We'll do it, if you make it easy enough to do it". That what some states are doing.

    Finally, all of it is semi-meaningless until Congress approves mandatory tax collection.

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