Hawaii’s business tax system has been dubbed a double taxation system because of its restrictions on dividends and shares, as well as other business tax exemptions.
However, that hasn’t stopped the Hawaiian government from using its powers to tax its citizens on the money it pays in corporate taxes.
“Hawaii has one of the highest business taxes in the country.
And, with one of our lowest corporate taxes, that means that there’s a huge amount of money that we’re going to have to pay in tax,” said Mark Biederman, chief revenue officer for the State of Hawaii.
Biederman told ABC News’ Hawaii Business that the government is looking at ways to cut taxes, such as using “corporate welfare” or making sure corporations have a tax rate lower than other tax bases.
He said that a corporate tax rate of 8.5% was one of many possible changes that would help reduce Hawaii’s corporate tax burden.
Hawaii’s corporate income tax rate is currently 8.9%.
Businesses are required to pay an effective tax rate on their income of 10% for every dollar of business income, with a minimum tax of 2%.
Hawaii also has an excise tax of 1.5%, which is calculated based on the cost of goods and services, not just the value of the goods.
Bieder said there was a proposal to reduce that rate to 1%, which could lower the overall rate.BEDER: Hawaii is the second highest in the nation.
It has one the highest corporate income taxes in state history.
And with one the lowest corporate tax rates, that leaves a lot of money we’re gonna have to get back from the taxpayers in the form of corporate welfare, tax breaks.
It’s really unfortunate.
It also is a double tax scheme because we have a business tax base that is so low that we are taxed in the business tax rate.
We have a very high tax base and it’s not even close to what other states are paying.
That’s what the government’s trying to do is lower that rate and then use the business income tax base as a way to raise money for other areas in the state.
Hawaiian officials have said that they will likely have to cut the corporate income and excise taxes as part of a restructuring to cut revenue in the coming years.