Tax Research Insights
Welcome! This site shares posts written by authors of the Department’s annual research reports. The researchers highlight interesting findings from the reports they produce. Each post focuses on a key idea from their research.
While fewer in number, national corporations generate the lion’s share of receipts in the State
Corporations are the main contributors of Hawaii business receipts. In tax year of 2019, corporations contributed 78% of Hawaii business receipts. There are two types of corporations: those operating only in the State of Hawaii and those that operate nationally (i.e....
Hawaii’s individual income tax is progressive
Higher income groups pay more in taxes relative to their income in Hawaii. A progressive tax structure is defined as one where higher income taxpayers pay a larger percentage of their income in taxes. By this metric, Hawaii’s individual income tax is clearly...
Increasing incomes mean fewer people claim the Food/Excise Tax Credit over time
The Food/Excise Tax Credit is the largest tax credit in the State promoting social welfare. In the 2019, there were 240,158 claims worth $28.4 million. Figure 6, Tax Credits Claimed by Hawaii Taxpayers (copied below), shows how the credit has evolved overtime. The...
C corporations represent the smallest number of businesses yet produce most of the State’s business receipts
A business is classified by its entity size Businesses can legally organize themselves in different ways. C corporations have more flexibility in their activities, but they are required to pay corporate income tax. S corporations and partnerships are pass-through...
A quarter of all gross receipts in Hawaii are exempted from the GET
The top five exemptions account for 60% of all exemptions claimed. The General Excise & Use Tax (GET), which is a very broad gross receipts tax, is the largest tax type in Hawaii. GET is a tax on income from almost all business activities, including wholesaling,...
Who benefits most from Hawaii’s Tax Credits?
This post highlights some interesting trends that emerged in the 2019 Report Tax Credits Claimed by Hawaii Taxpayers. Figure 5 from the report (see below) shows how welfare enhancing tax credits varies by income and some interesting results emerge: The Refundable...