How to Apply For GET and TAT Licenses

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How to Apply For GET and TAT Licenses

Postby makahava » Wed Apr 02, 2014 1:28 pm

How to Apply For GET and TAT Licenses
Disclaimer: The author is not a CPA or affiliated with the Hawaii State Department of Tax. If you have questions about taxes, call them at 808-587-4242 or contact them at http://tax.hawaii.gov/contact/ . We can refer you to a General Excise Tax specialist, but do not ask us for tax advice — everything we know about the GET and TAT is right here in this article.
GET and TAT Licenses
In order to use your condo as a part time owner use / part time vacation rental, one of the procedures required is that the new owner obtains General Excise Tax (GET) and Transient Accommodations Tax (TAT) licenses. We will explain how to get these licenses in this article.
What Are These Licenses For?
General Excise Tax is similar in some respects to a sales tax. When you buy something at a store, GET is usually added-on to the purchase price. GET also applies to independent contractors, such as landlords, realtors, handymen etc. The State of Hawaii collects GET at several different levels.
Transient Accommodations Tax is also known as the hotel room tax. It applies primarily to short term rentals, generally defined as less than 180 days (6 months).

Tax Rates
The GET rate is 4.5%. However, the taxpayer must pay the State of Hawaii "tax on tax". For example a $100 sale would normally generate $4.50 in tax. Vendors generally pass the tax on to the consumer and one might conclude the amount with passed on tax would be $104.50. Actually, the state charges 4.5% on the amount collected, which is $104.50 so the tax due is $4.70 ($104.50 x 4.5%).
In simpler terms, if you want to pass the cost of the tax onto the consumer, the total amount to be collected is 4.712%
The TAT rate is charged at 9.25%. The state does not charge "tax on tax" for this room tax.
Short term rentals such as hotel rooms are subject to BOTH GET and TAT. A total of 13.962% tax. Thus, a $100 room rate would cost a customer about $113.96 with the taxes added..
How to Apply for the Licenses
If you are getting the licenses for a transient rental, make sure to apply for both the GET and TAT licenses. For long term rentals (6 month leases or longer), a GET license is all you need.
ONLINE
Apply for the licenses online! Visit the Hawaii Business Express website at https://hbe.ehawaii.gov/BizEx/home.eb . Click the box on the right "QUICK FILE— Use Your Own Forms". Log in here.... Or, If you are a first time user, then click "Create an Account" to the right side of the page, and proceed to setting up your account.
1. Once you have an account, choose the top form on the list: BB-1.
2. Then choose "new business"-.
3. You should now be on this page:
https://hbe.ehawaii.gov/BizEx/filing/ex ... ogCss=true

4. Chose "general excise tax license" and check "transient accommodation"
NOTE-If you already have a GET and/or TAT license, you should apply for a new, separate license specifically for your units owned at this property.
Here are detailed instructions for applying for a license. Please use this info as a guide, read each question on the form and select the answer appropriate for your situation.


1a. Skip
2. taxpayer name- yours
3. DBA Name-Your own name is often the best. Unless you have formed a partnership or trust
4. FEIN- this would be your social security number unless you are a business with employees
5. Sole Proprietorship is usually the best answer.
6. Date business began : whatever date you plan on starting rentals
7. skip unless you have partnership, trust LLC, etc
8. skip unless you have partnership, trust LLC, etc
9. Accounting Period-Calendar.
10. Accounting Method-Cash.
11. NAICS# is 721199
(NOTE- This industry standard classification is the same for Canada and the US)
Business activity: guest house
12. Mailing address: your address
13. Physical/ Business address: the condo unit address
14. skip
15. your phone #s
16. skip
17. Disability Exemption? If you qualify for this exemption for Federal Taxes you may.
18-20. skip
21. only if you own as partners
22-28. skip
29. Transient Accommodations Business Activity? -Yes.
30. whatever date you plan on starting rentals
31. Filing Period-Monthly. (you can do quarterly if you think you will not be renting very often).
Check both A (GET) and C (TAT)
After completing the online form, you will be prompted to pay a fee of about $30.00. Within a few days, the State should be e-mailing you with your GET/TAT number.
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