IRS.com is a privately owned website that is not affiliated with any government agencies.

Obtain a Tax ID (EIN) Number and Register Your Business in Hawaii

Trying to obtain a Tax ID (EIN) Number in Hawaii? You’ll need this official tax ID in order to run your business. Learn how to obtain your official Hawaii Tax ID Number online.

If you've ever wanted to start a business in Hawaii, now's the perfect time. Assuming you have a good idea in place, you can work up a business plan and take advantage of online resources to make sure you run your company in a legally compliant way. Fortunately, this process is easier than it seems.

The state is friendly to small businesses, with more than 128,000 small businesses comprising 99.3 percent of all entrepreneurial activity in Hawaii. Together, those businesses employ more than half of all Hawaii employees, which amounts to more than 271,000 people. Hawaii's growth rate lags slightly behind the national average, but it still going strong in industries like agriculture, tourism, and community services.

Steps to Obtaining a Tax ID (EIN) Number and Registering a Hawaiian Business

  1. Forming a Business in Hawaii
  2. Federal Tax ID (EIN) Number Obtainment
  3. Hawaii State Tax ID Number
  4. Localized Licenses and Permits in Hawaii

Apply for a Hawaii Tax ID (EIN) Number

Apply for a Tax ID (EIN) Number in Hawaii & Obtain your Tax ID in 1 Hour or less.

Begin Hawaii Tax ID (EIN) Application

1. Forming a Business in Hawaii

If you're thinking of forming a business in Hawaii, the first thing you should do is you need to decide what type of business structure to choose for your company. There are many types of business structures to choose from, including these common structures:

  • Sole proprietorships. Sole proprietorships are only good for a small percentage of businesses, but they work well in those positions. Sole proprietorships are easy to start and manage on an ongoing basis, which makes them ideal for new business owners looking to start something small. You'll pay taxes as an individual on any money you make in the business, but will be exposed to limitless liability issues; any debts you take on will be yours, personally, and you may be held accountable for actions you take in the business.
  • Partnerships. Partnerships work like sole proprietorships, except the responsibilities, income, and taxes are split between multiple partners, instead of falling on a single person.
  • Limited liability companies (LLCs). LLCs are a step up in terms of complexity, but aren't too hard to manage. As their title suggests, they provide some degree of liability protection; they're treated as separate legal entities, and may take on debts of their own. They can also shield you from liability in many cases. LLCs are considered "pass-through" entities, because they aren't specifically required to pay taxes on income they generate. Instead, you can withdraw income or profits as you see fit; you'll be taxed on whatever you withdraw, when you choose to withdraw it. In Hawaii, you'll be required to file an annual report.
  • Corporations. Corporations are more complex. They're harder to start and manage on an ongoing basis, since they're subject to so many more rules and regulations. This is because corporations have the unique ability to raise funds by issuing public shares, which makes them the ideal choice for any business attempting to grow to a national (or international) level. Corporations also provide much more liability protection, since they serve as separate legal entities. However, they are required to pay taxes on all income (in addition to you paying taxes as an individual on money you make from the company), resulting in double taxation. In Hawaii specifically, you'll owe corporate income tax at a marginal rate, from 4.4 percent on the first $25,000 of income, up to 6.4 percent on income over $100,000.

While it's possible to change the structure of your business in the future, it's more efficient to choose the long-term structure you need from the beginning.

2. Federal Tax ID (EIN) Number Obtainment

Most Hawaii businesses will be required to get a federal tax ID number, sometimes called an employer identification number or EIN. This number is given to you when you register your business with the federal government, and serves as a 9-digit, unique identifying number for your business. It's a requirement if you're going to hire any employees, if your business has more than one member, or if you're going to handle finances with your business (such as opening a business bank account or applying for a business line of credit).

The easiest way to get this number is to make use of our federal tax ID number obtainment services. Through our online application, you'll simply provide a few details about the nature of your business and founding members, and you'll receive your tax ID in an hour or less.

3. Hawaii State Tax ID Number

Your business may also be required to have a Hawaii state tax ID number. Like a federal tax ID number, this serves as a unique identifier, but it registers your business at the state level, rather than the federal level. You'll need one of these numbers if you're going to sell taxable goods and services in the state of Hawaii, if you're going to hire Hawaii employees, or if you're going to owe excise taxes on regulated products like alcohol or tobacco.

You'll need a federal tax ID number before you get a Hawaii state tax ID number. Once you have that, you can use our Hawaii state tax ID number obtainment services to get your state tax ID number as quickly as possible (usually within 4 to 6 weeks).

4. Localized Licenses and Permits in Hawaii

All businesses in Hawaii will need to register with the state government, but there's no general business license or permit you'll need before you start operating in the state. Instead, licenses, permits, certifications, and other authorizations to operate are handled at the local level. You may need one or more permits to operate legally depending on your city, county, and your specific industry. Make sure to talk to your local Chamber of Commerce to make sure you get the right certifications before you begin operations. You'll likely need a federal tax ID number to apply.

Hawaii occupies an interesting niche, being separated from the contiguous 38 states and offering a much different climate than the rest of the United States. If you're interested in living an island-centric lifestyle in addition to building a business, it may be the perfect state in which to become an entrepreneur. Major cities like Honolulu, Hilo, and Kailua, split between the islands of the archipelago, offer perfect urban areas to suit your startup.

Regardless of what business structure you choose, becoming an entrepreneur is the beginning of your next career journey. Once you get all the paperwork and registration out of the way, you'll have the freedom to forge your own path in business.


Related Tax ID (EIN) Number Articles:


You May Also Like