Index Component
Hawaii — Sales Taxes
#37 on Sales Taxes out of 50 states
Score 4.16 / 10 · up 2 places from 2026
21.7% of the total Index score
Hawaii ranks 37th for sales taxes on the 2027 State Tax Competitiveness Index.
Hawaii on Sales Taxes across the States
#37 on Sales TaxesThe row places the states on a 0 to 10 score scale for Sales Taxes. Hawaii is the large outlined dot, and the dashed line is the 50-state median, so a dot to its right scores better than the typical state. Hover over or tab to any dot for detail, and select it to open that state's Sales Taxes page.
Sales Taxes
#37 4.16
- Hawaii
- Other states, by rank (1st to 50th)
- 50-state median
Sales Taxes Ranking Changes, 2020–2027
#37 in 2027 · down 2 places from 2020Hawaii ranked 35th on Sales Taxes in 2020 and ranks 37th in 2027, a decline of 2 places. The axis is zoomed to the state's range. Ranks for 2020 through 2026 are backcast under the current methodology.
Ranks and Scores on Sales Taxes
Every state's rank and score on Sales Taxes in 2026 and 2027, with the change in rank, and its overall rank. A rank of 1 is best. The District of Columbia's ranks carry an asterisk because they do not affect the states' ranks, and DC stays at the bottom of the table.
See the Sales Taxes Map for All States
| State | 2026 Rank | 2026 Score | 2027 Rank | 2027 Score | Rank Change | Overall Rank |
|---|---|---|---|---|---|---|
 New Hampshire | 1 | 8.57 | 1 | 8.60 | No change since 2026 | 6 |
 Delaware | 2 | 8.56 | 2 | 8.60 | No change since 2026 | 22 |
 Montana | 3 | 8.49 | 3 | 8.53 | No change since 2026 | 7 |
 Oregon | 4 | 8.23 | 4 | 8.26 | No change since 2026 | 37 |
 Alaska | 5 | 7.53 | 5 | 7.56 | No change since 2026 | 3 |
 Wyoming | 6 | 6.14 | 6 | 6.23 | No change since 2026 | 1 |
 Wisconsin | 7 | 6.10 | 7 | 6.14 | No change since 2026 | 20 |
 Idaho | 8 | 5.96 | 8 | 6.00 | No change since 2026 | 13 |
 Michigan | 10 | 5.55 | 9 | 5.51 | Up 1 place since 2026 | 25 |
 Iowa | 11 | 5.48 | 10 | 5.51 | Up 1 place since 2026 | 18 |
 Maine | 9 | 5.55 | 11 | 5.46 | Down 2 places since 2026 | 40 |
 North Carolina | 12 | 5.43 | 12 | 5.41 | No change since 2026 | 11 |
 Virginia | 13 | 5.35 | 13 | 5.38 | No change since 2026 | 31 |
 Nebraska | 14 | 5.24 | 14 | 5.27 | No change since 2026 | 16 |
 Indiana | 15 | 5.24 | 15 | 5.27 | No change since 2026 | 14 |
 Florida | 17 | 5.15 | 16 | 5.19 | Up 1 place since 2026 | 4 |
 North Dakota | 16 | 5.16 | 17 | 5.18 | Down 1 place since 2026 | 12 |
 Pennsylvania | 18 | 5.04 | 18 | 5.08 | No change since 2026 | 30 |
 Kentucky | 19 | 5.04 | 19 | 5.07 | No change since 2026 | 26 |
 Connecticut | 21 | 4.99 | 20 | 5.02 | Up 1 place since 2026 | 46 |
 Georgia | 20 | 5.04 | 21 | 5.02 | Down 1 place since 2026 | 24 |
 Utah | 22 | 4.98 | 22 | 5.01 | No change since 2026 | 10 |
 Kansas | 23 | 4.88 | 23 | 4.93 | No change since 2026 | 19 |
 Massachusetts | 24 | 4.87 | 24 | 4.90 | No change since 2026 | 45 |
 Mississippi | 25 | 4.87 | 25 | 4.88 | No change since 2026 | 27 |
 Missouri | 26 | 4.79 | 26 | 4.81 | No change since 2026 | 9 |
 New Jersey | 27 | 4.79 | 27 | 4.77 | No change since 2026 | 48 |
 South Carolina | 28 | 4.66 | 28 | 4.68 | No change since 2026 | 34 |
 Vermont | 29 | 4.64 | 29 | 4.64 | No change since 2026 | 42 |
 Rhode Island | 30 | 4.49 | 30 | 4.52 | No change since 2026 | 39 |
 South Dakota | 31 | 4.44 | 31 | 4.47 | No change since 2026 | 2 |
 Minnesota | 32 | 4.35 | 32 | 4.38 | No change since 2026 | 41 |
 West Virginia | 33 | 4.33 | 33 | 4.35 | No change since 2026 | 29 |
 Oklahoma | 34 | 4.29 | 34 | 4.31 | No change since 2026 | 15 |
 Texas | 36 | 4.23 | 35 | 4.25 | Up 1 place since 2026 | 5 |
 Maryland | 38 | 4.15 | 36 | 4.17 | Up 2 places since 2026 | 44 |
| Hawaii | 39 | 4.15 | 37 | 4.16 | Up 2 places since 2026 | 43 |
 Colorado | 40 | 4.13 | 38 | 4.14 | Up 2 places since 2026 | 33 |
 New York | 41 | 4.10 | 39 | 4.13 | Up 2 places since 2026 | 50 |
 Arizona | 35 | 4.27 | 40 | 4.13 | Down 5 places since 2026 | 17 |
 Nevada | 42 | 4.02 | 41 | 4.05 | Up 1 place since 2026 | 21 |
 Arkansas | 43 | 4.00 | 42 | 4.03 | Up 1 place since 2026 | 32 |
 Illinois | 37 | 4.20 | 43 | 3.97 | Down 6 places since 2026 | 38 |
 Ohio | 44 | 3.96 | 44 | 3.89 | No change since 2026 | 36 |
 Tennessee | 45 | 3.77 | 45 | 3.80 | No change since 2026 | 8 |
 New Mexico | 46 | 3.73 | 46 | 3.75 | No change since 2026 | 28 |
 California | 47 | 3.64 | 47 | 3.64 | No change since 2026 | 49 |
 Alabama | 48 | 3.39 | 48 | 3.41 | No change since 2026 | 35 |
 Louisiana | 50 | 2.90 | 49 | 2.82 | Up 1 place since 2026 | 23 |
 Washington | 49 | 3.13 | 50 | 2.72 | Down 1 place since 2026 | 47 |
 District of Columbia | 45* | 3.90 | 44* | 3.94 | — | 47* |
*DC's rank does not affect the states' ranks.
Hawaii and Its Neighbors on Sales Taxes
#37 on Sales TaxesHawaii shares no land border with another state, so its closest competition is national rather than regional. Any state can still be compared below.
What's in This Component
The sales tax component measures the impact of both sales and excise taxes, particularly when they fall on business inputs.
Each component is built from two equally weighted parts, called subindices: one measures the tax rates and the other the tax base, meaning what the tax applies to. Each subindex is made up of one or more variables.
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Rate Subindex
This subindex measures the average sales tax rate applicable to in-state retail shopping and taxable business-to-business transactions (with the weight of 75 percent) as well as a range of excise taxes (with the weight of 25 percent). A combined rate is computed by adding the general state rate to the population-weighted average of the county and municipal rates.
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Base Subindex
The sales tax base subindex is computed according to five features of each state’s sales tax: whether the base includes a variety of business-to-business transactions such as machinery, raw materials, office equipment, business leases, data center purchases, and several digital goods and services; whether the base includes goods and services typically purchased by consumers; whether the base includes services; whether the state leans on sales tax holidays; and whether the state embraces unity and uniformity in its sales tax base and collections and provides robust safe harbor provisions for remote sellers.
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What This Component Includes
The variables behind it, grouped as in the report's tables:
- Sales and Excise Tax Rates
- Business-to-Business Exemptions
- Consumer Goods and Services in the Base
- Sales Tax Structure
How the Score Is Built
Each part is scored from 0 to 10, with 10 the most competitive. Rank is among the 50 states.
| Part | Score | Rank |
|---|---|---|
| Combined state and local sales tax rate | 6.78 | 6 |
| Gasoline excise tax | 8.52 | 2 |
| Diesel excise tax | 8.86 | 2 |
| Tobacco excise tax | 2.08 | 45 |
| Beer excise tax | 2.81 | 48 |
| Distilled spirits excise tax | 8.37 | 26 |
| Excise taxes | 5.55 | 40 |
| Digital advertising tax | 0.00 | 47 |
| Rate Subindex | 5.58 | 11 |
| Business inputs in the sales tax base | 0.00 | 50 |
| Goods in the sales tax base | 8.33 | 6 |
| Services in the sales tax base | 10.00 | 1 |
| Sales tax base breadth | 1.83 | 50 |
| Remote seller and marketplace rules | 8.33 | 31 |
| Sales tax holidays | 10.00 | 1 |
| Base Subindex | 3.87 | 50 |
| Sales Taxes Score | 4.72 | 37 |
Tax Data Explorer
Every sales taxes variable behind Hawaii's 2027 scores, grouped by the report's tables, as of July 1, 2026. Search the variables and values, or add up to 4 states to compare side by side.
46 data points
Sales and Excise Tax Rates
| Variable | Hawaii |
|---|---|
| State Sales Tax Rate | 4.00% |
| Average Local Sales Tax Rate | 0.50% |
| Maximum Local Sales Tax Rate | 0.50% |
| Gasoline Tax (Cents per Gallon) | 18.50 |
| Diesel Tax (Cents per Gallon) | 18.5 |
| Cigarette Tax (Dollars per Pack of 20) | $3.60 |
| Beer Tax (Dollars per Gallon) | $0.93 |
| Spirits Tax (Dollars per Gallon) | $5.98 |
| Vapor Tax Ratio to Cigarette Tax | 183.1667% |
Business-to-Business Exemptions
| Variable | Hawaii |
|---|---|
| Business Inputs | Some Taxable |
| Farm Equipment | Taxable |
| Office Equipment | Taxable |
| Manufacturing Machinery | Taxable |
| Manufacturing Raw Materials | Taxable |
| Business Fuel and Utilities | Taxable |
| Business Leases and Rentals | Taxable |
| Information Services | Taxable |
| Software as a Service (SaaS) | Taxable |
| Platform as a Service (PaaS) | Taxable |
| Digital B2B Products | Taxable |
| Payroll Services | Taxable |
| Data Center Purchases | Taxable |
| Digital Advertising Tax | Yes |
Consumer Goods and Services in the Base
| Variable | Hawaii |
|---|---|
| Groceries | Taxable |
| Clothing | Taxable |
| Prescription Medication | Exempt |
| Nonprescription Medication | Taxable |
| Gasoline | Taxable |
| Landscaping | Taxable |
| Repair Services | Taxable |
| Real Estate Services | Taxable |
| Parking | Taxable |
| Dry Cleaning | Taxable |
| Fitness Services | Taxable |
| Barber Services | Taxable |
| Veterinary Services | Taxable |
| E-Books | Taxable |
| Streaming Video | Taxable |
| Medical Services | Taxable |
| Legal Services | Taxable |
| Financial Services | Taxable |
| Accounting Services | Taxable |
| Sales Tax Holiday | No |
Sales Tax Structure
| Variable | Hawaii |
|---|---|
| Uniform Base Definitions | Yes |
| Unified Tax Administration | Yes |
| Safe Harbor for Remote Sellers | Sales or Transactions Threshold |
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About the Authors
Janelle Fritts is a Senior Policy Analyst with the Tax Foundation’s Center for State Tax Policy. She is the lead researcher on the annual State Tax Competitiveness Index and serves as a resource to policymakers in their efforts to modernize and improve the structures of their state tax codes. Her work has been cited in The New York Times, the Associated Press, Bloomberg, and numerous state media outlets across the country.
Jared Walczak is a Senior Fellow at the Tax Foundation, where he spent five years as Vice President of State Projects, and president of Walczak Policy Consulting.
Nicole Fox is a Policy Analyst with the Center for State Tax Policy at the Tax Foundation, where she serves as a resource to policymakers in their efforts to modernize and improve the structure of their state tax codes.
Katherine Loughead is the Vice President of State Tax Policy at the Tax Foundation, where she oversees the state tax policy team’s research agenda and serves as a resource to policymakers in their efforts to modernize and improve the structure of their state tax codes.
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