LLC Annual Report and Tax Filing Requirements in Hawaii

When you form a limited liability company (LLC), you create a business with limited liability and flexible management and tax options. While LLCs have many benefits, you do need to work to maintain your LLC by preparing and filing various documents with the state.

If you have a Hawaii LLC, you'll need to file an annual report and file and pay applicable business and employer taxes. Let's look at the most important ongoing reporting and state tax filing requirements for LLCs in Hawaii. (If you'd like information about other states' LLC requirements, check out our article on LLC tax and filing requirements.)

Hawaii LLC Annual Report

The State of Hawaii requires you to file an annual report for your LLC with the Hawaii Department of Commerce and Consumer Affairs (DCCA). You can file your annual report with the Business Registration Division (BREG) of the DCCA either:

• online through Hawaii Business Express, or
• by mailing, hand delivering, emailing, or faxing a paper copy to the BREG office.

If you file your report online, you can sign up for an email reminder for your annual report filing.

The annual report is due during the calendar quarter of the anniversary month of your LLC's formation. For example, if your LLC was formed on July 15 then your report would be due each subsequent year between July 1 and—at the latest—September 30. As of 2024, the fee to file your annual report in Hawaii is $12.50 for online filings and $15 for paper filings.

The BREG has a help section for annual reports on its website that provides more details and guidance.

State Business Taxes in Hawaii

When it comes to income taxes, most LLCs are considered "pass-through tax entities (PTEs)." Specifically, by default, multi-member LLCs are taxed as partnerships, and single-member LLCs are taxed as disregarded entities. As a PTE, an LLC passes on the responsibility for paying income taxes to its members. So, the LLC doesn't pay taxes on its income, only the members do.

As an LLC member, you'll report and pay your share of the LLC's income on your personal tax return. You must file and pay taxes for you and your business to the State of Hawaii Department of Taxation (DOTAX). You can file and pay your taxes online using Hawaii Tax Online (HTO).

Electing corporate tax status. While LLCs are typically taxed as partnerships by default, you can elect to have your LLC taxed as a corporation for federal tax purposes. You'll need to file IRS Form 2553 with the IRS to make this corporate tax election. If you elect to have your LLC taxed as a corporation a the federal level, your LLC will also be taxed as a corporation in Hawaii and you'll need to pay the state's corporation income tax. As of 2024, Hawaii's corporation income tax is based on a small series of marginal rates currently ranging from 4.4% to 6.4%. Use the state's corporation income tax return (Form N-30) to pay the tax.

Electing PTE tax status. As of 2024, Hawaii partnerships and S corporations (including LLCs taxed as either) can elect to pay income taxes at the entity level. Your electing LLC would pay the sum of the members' distributive shares and guaranteed payments at the highest individual tax rate. If an LLC makes this election, then LLC members will receive an income tax credit for their pro rata share of the income taxes the LLC paid. You'll need to make the irrevocable election by April 20 of the taxable year for every year you wish to pay the PTE tax. If your LLC elects to pay the PTE tax, you must make estimated quarterly payments to the DOTAX via HTO. See the DOT's tax information release for more details on the PTE tax election.

Hawaii Employer Taxes

Does your LLC have or plan to have employees? If so, you'll need to pay employer taxes to the federal and state governments. Before you start reporting and paying these taxes, you'll need to apply for an employer identification number (EIN) from the IRS.

Withholding employee wages. As a Hawaii employer, you must withhold and pay employee income taxes to DOTAX. Begin by registering your business for a withholding account number either online through HTO or on paper using Form BB-1. Then, you'll need to file quarterly withholding tax returns using Form HW-14. You must pay taxes using Form VP-1 either quarterly, monthly, or semiweekly depending on your LLC's annual withholding tax liability. You'll also need to file an annual withholding tax transmittal (Form HW-30) each year to reconcile your LLC's tax withholding. You can file and pay these taxes online through HTO. Check out the withholding tax for employer section on the DOTAX website for more details, including a comprehensive employer's tax guide.

Unemployment insurance (UI) tax. In addition to withholding taxes, your LLC will probably need to pay state UI taxes to Hawaii's Department of Labor and Industrial Relations (DLIR). Your business can register for a UI account number through Hawaii UI (HUI) Express. You must file wage reports quarterly to the DLIR using Form UC-B6. You can file the reports and pay UI taxes through HUI Express.

Hawaii General Excise Tax

Hawaii imposes a general excise tax (GET) on businesses for most business activities. So if your LLC does business in Hawaii, you'll likely be required to pay the GET to DOTAX.

While this tax effectively takes the place of a sales tax in Hawaii, the GET isn't the same as a sales tax. There are two major differences between the GET and a sales tax:

• The GET is a tax on businesses for the privilege of doing business in the state (like a franchise tax) whereas a sales tax is a tax on customers for their purchases.
• The GET is a tax on income whereas a sales tax is a tax on sales.

Though this tax is imposed on the business (and not the customer), you can build the tax into the price of your goods or services. But you'll need to inform the customer of this additional cost.

You'll need to register your business with DOTAX to pay the GET. You can register online through HTO or by paper with Form BB-1. You'll need to pay a $20 registration fee. Once registered, you'll receive a GET license.

Depending on your annual tax liability, your LLC must file GET returns either monthly, quarterly, or semiannually. You'll use Form G-45 to file these returns. Your LLC must also file an annual return with Form G-49 to reconcile your LLC's tax payments throughout the year. You can file and pay the GET through HTO.

You can find more details on DOTAX's GET FAQ webpage. You can also learn more by reading DOTAX's publication, An Introduction to the General Excise Tax.

LLC Registration in Other States

If your LLC plans to do business outside of Hawaii, then you might need to qualify as a foreign (out-of-state) business in the states where you'll have business activities. Every state has rules and requirements for when an out-of-state business must register to do business in the state.

Typically, you'll need to qualify as a foreign business if your LLC:

• has a physical presence in the state (such as an office, warehouse, or store)
• hires employees in the state, or
• solicits business in the state (such as by telephone, print ads, mail, or the internet).

You should look up the state's business laws around qualifying as a foreign business. You can also use our state guide to qualifying to do business outside your state to determine whether you need to register your LLC.

More Information About Hawaii LLCs

You can find useful information and resources on how to start and manage your LLC on the DCCA's Hawaii Business Express website. Hawaii's DOTAX website also has helpful guidance, including:

• Hawaii tax information
• tax deadlines
• laws and guidance
• forms and instructions
• frequently asked questions, and
• online services.

If you'd like more general guidance related to operating your LLC, you can read the articles in the LLC section of our website.

Taxes and filing deadlines can quickly become complicated and overwhelming. If you have questions about which taxes your LLC is responsible for or what your tax liability is, speak with a Hawaii business lawyer or tax professional. They can help you break down your LLC's legal responsibilities to the SOS, DOTAX, and other state departments and agencies.