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Hawaii Business License Basics

Hawaii Business License Basics

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Hawaii Business License Basics

Starting a small business in Hawaii often means registering with several federal, state, and local agencies. Let’s review common Hawaii business license registrations so your business starts off right.

Related: Guide to starting a business in Hawaii 

First Step – Set Up the Business

Sole proprietorship: In Hawaii, a sole proprietorship is a business owned by one person. It is the simplest form of business structure, with no legal distinction between the owner and the business. The owner has complete control over the business but is also personally liable for all debts and obligations.

General partnership: A general partnership in Hawaii is an agreement between two or more individuals to operate a business together. No formal setup is needed, but it’s a great idea to draw up a partnership agreement to outline operations and responsibilities.

Corporation: A Hawaii corporation is a legal entity separate from its owners, known as shareholders. It offers limited liability protection, meaning shareholders are not generally personally responsible for the corporation’s debts and liabilities. The downside is that corporations are the most complex structure to start and operate. 

Limited Liability Company (LLC): A Hawaii LLC combines aspects of a sole proprietorship or partnership and a corporation. It provides limited liability protection to its owners, called members, shielding their personal assets from the company’s debts and liabilities, in addition to a flexible management and tax structure.

Related: Comparison of Business Structures

What Licenses Do Hawaii Businesses Need?

With the business structure out of the way, we can begin looking at the different types of registrations businesses in Hawaii may need. There isn’t a standard business license, as requirements vary depending on where the business is located and its activities. Here is a general overview of the different registrations your business may need.

General Business License

There is no general business license from the state, however, many counties require businesses to be licensed in order to operate. Rules for business registration vary depending on location and what the business does. Below are a few counties that have licensing requirements.

  • Hawaii: Several types of businesses are licensed in Hawaii County, such as auctioneers, firearm sales, dance halls, pawnbrokers, and second-hand dealers. Home-based businesses will need to complete a Home Occupation Declaration from the County of Hawaii Planning Department.
  • Maui: Maui County has a few requirements for businesses, such as liquor licenses and zoning.
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For as little as $99, you can save a lot of time and know your business is in compliance with local, state, and federal requirements. 

Trade Name Registration

Sole proprietorships and partnerships in Hawaii that want to operate under a business name other than the full name of the owner(s) will register for a Hawaii Trade Name (also known as a Doing Business As, DBA, or Fictitious Name) with the Department of Commerce and Consumer Affairs, Business Registration Division.

Building & Zoning Permits

Zoning: In Hawaii, zoning regulations are established by each county. Before starting a business, check with your county’s planning department to ensure your business complies with local zoning laws. For home-based businesses, you may need a home occupation permit, which is issued by the county planning department.

Building Permit: If you plan to construct, alter, or repair a building for your business in Hawaii, you’ll need a building permit from your county’s building department. In Hawaii, each county has its own building department responsible for issuing permits and ensuring compliance with the state’s building code. For example, in Honolulu County, building permits are issued by the Department of Planning and Permitting.

Signage Permit: Before installing any business signage in Hawaii, you must obtain a sign permit from your county’s planning or building department. Each county has its own signage regulations and permit requirements. For instance, in Maui County, sign permits are issued by the Department of Planning, while in Hawaii County, the Department of Public Works is responsible for sign permits. Check with your local county for specific signage requirements and permit application processes.

Hawaii Tax Identification Number

Any entity conducting business activities within Hawaii is required to register Form BB-1 – State of Hawaii Basic Business Application. The BB-1 Form allows a business to register for a variety of tax licenses and permits with the Hawaii Department of Taxation, the most common of which is the General Excise Tax license (GET). The GET takes the place of sales tax in Hawaii. There is a $20 one-time filing fee

Hawaii does not have a sales tax but instead has the General Excise Tax, which applies to all gross receipts or gross income of a business. Additionally, businesses located in Oahu County may also be subject to the Oahu County Surcharge Tax.

Resale Certificate

After obtaining the tax number, most businesses will want to obtain a Hawaii Resale Certificate. This allows them to not pay sales tax on their inventory purchases meant to be resold to customers.

Occupational License

A variety of occupations in the state are regulated and need to be registered before offering certain services. A few different professions that require licensing in Hawaii include; accountants, contractors, vehicle repair, pest control, private detectives, and many more. Additional information, fees, and licensing requirements for professions are available from the Hawaii Department of Commerce and Consumer Affairs, Professional and Vocational Licensing Division (DCCA).

Employer Identification Number (EIN)

The Hawaii Employer Identification Number (EIN), also known as a Federal Tax Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses operating in Hawaii. It is used for tax filing and reporting purposes, similar to how an individual uses a Social Security number. Companies can apply for an EIN through the IRS website or by submitting a paper form.

Next Steps

While it’s a good start, there are so many different licenses that may be needed. Double-check with the City Clerk’s Office, Chamber of Commerce, and/or Economic Development office in your area before opening your doors.

Author

  • Greg Bouhl

    With over two decades as an entrepreneur, educator, and business advisor, Greg Bouhl has worked with over 2,000 entrepreneurs to help them start and grow their businesses. Fed up with clients finding and acting on inaccurate and outdated information online, Greg launched StartUp101.com to be a trusted resource for people starting a business.

Hawaii Business License Basics

Hawaii Business License Basics

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