What are the most expensive GET mistakes you see?

The most expensive GET mistakes aren’t dramatic one-time errors. They’re quiet structural problems that repeat every filing period and compound over months or years.

Assuming sales-tax-style exemptions exist is the most fundamental mistake. If you’re coming from the mainland or working with a bookkeeper who is, this catches people constantly. Hawaii’s General Excise Tax is not a sales tax. It applies to gross business receipts, not just retail sales of tangible goods. Services are taxable. Business-to-business transactions are taxable. There are very few exemptions compared to what mainland businesses expect. A service business that assumes their revenue is exempt can accumulate significant back taxes before anyone catches it.

Forgetting the county surcharge is another common error. The base GET rate is 4% for most retail activity, but each county adds a surcharge. On Maui, Oahu, Hawaii Island, and Kauai, the combined rate is higher than the base state rate. If you’re only collecting and remitting the state portion, you’re short on every transaction.

Passing on the wrong percentage to customers also adds up. Hawaii allows businesses to pass GET through as a separate line item, but the math is particular. Because GET applies to all gross receipts including the passed-on amount, passing on exactly the tax rate leaves you short. The allowable pass-on percentage is higher to make the business whole. Businesses that invoice 4.5% instead of the correct pass-on rate eat the difference on every invoice.

Misclassifying between retail and wholesale rates goes both directions. Retail sales to end consumers face the full 4% rate plus county surcharge. Sales to licensed resellers for resale qualify for the 0.5% wholesale rate. Some businesses pay retail when wholesale applies and overpay for years. Others apply wholesale to transactions that don’t qualify and face back taxes and penalties later. Working with a Maui accounting company that understands the classification rules helps avoid both scenarios.

Stopping filings during slow periods creates unnecessary problems. Even when gross receipts are zero, the filing requirement remains. Businesses that skip filings during slow months trigger late filing penalties and create gaps in their compliance history.

What makes these mistakes expensive is that they’re cumulative. Each one might seem small on a single return, but multiply it across years of filings and the numbers become significant. Every one of them is avoidable with correct setup and a consistent rhythm. Our Hawaii GET compliance service handles registration, classification, periodic and annual filings, and the county surcharges that make GET genuinely complicated.

If you’re not certain your GET is handled correctly, schedule a consultation and we’ll take a look.