1031 Exchange Hawaii

Hawaii Opportunity Zones

Capital Gains Rates

State Rate 7.25%

Local Rate 0.00%

Deduction A lower rate for capital gains

Combined Rate 32.25%

Additional State Capital Gains Tax Information for Hawaii

While the federal government taxes capital gains at a lower rate than regular personal income, states usually tax capital gains at the same rates as regular income - this is not the case in Hawaii, which utilizes a lower rate than its personal income tax rate. The Combined Rate accounts for Federal, State, and Local tax rate on capital gains income, the 3.8 percent Surtax on capital gains and the marginal effect of Pease Limitations (which increases the tax rate by 1.18 percent).

Additional State Income Tax Information for Hawaii

Hawaii allows any taxpayer, other than a corporation, acting as a business entity in more than one state who is required by this chapter to file a return to elect to report and pay a tax of 0.5% of its annual gross sales (1) where the taxpayer's only activities in this state consist of sales; and (2) who does not own or rent real estate or tangible personal property; and (3) whose annual gross sales in or into this state during the tax year is not in excess of $100,000. Haw. Rev. Stat. § 235-51 (2015).

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Source: Tax Foundation State Individual Tax Rates and Brackets for 2020 as of March 2020