When a business purchases inventory to resell, it can often do so without paying sales tax.  In order to do so, the retailer will need to provide a Hawaii Certificate of Resale (also referred to as a Resale Certificate) to their vendor. 

Learn how the Hawaii Certificate of Resale works, how to get one, and more.

Related: How to start a business in Hawaii

How Does a Hawaii Certificate of Resale Work?

When retailers purchase products to resell, they often don’t pay sales tax to the supplier on the purchase. The sales tax will still be paid, but instead of the retailer paying the state sales tax, the retailer charges sales tax to their customer on the final value of the merchandise.

For instance, when a souvenir shop in Hawaii purchases products such as jewelry, crafts, or clothing to sell in their store, by having a Certificate of Resale, the shop owner won’t often pay sales tax on the purchase of its inventory. When a tourist purchases a souvenir, the retailer will charge sales tax to the customer based on the full price of the item. Then, typically at the end of the month, the shop owner will take all of the state sales taxes that were collected and send them to the Hawaii Department of Taxation.

It’s important to understand that the sales tax exemption is only intended to be used for inventory that will be resold and not intended for the tax-free purchase of tangible personal property used in normal business operations such as paper, pens, etc.

How To Fill Out the Hawaii Certificate of Resale (Form G-17)

Before a business starts selling products or providing taxable services, it must first get a Hawaii General Excise Tax License (sometimes referred to as a sales tax license or seller’s permit) from the Hawaii Department of Taxation. After registering for the license, the Hawaii Department of Taxation will issue a state tax identification number, which will be used to fill out the Certificate of Resale.

Step 1: Begin by downloading the Hawaii Certificate of Resale Form G-17 

Step 2: Identify the name and address of the seller

Step 3: Enter the date the certificate was prepared

Step 4: Include the buyer’s Hawaii Tax Identification Number

Step 5: Describe the nature and character of the buyer’s business

Step 6: Indicate whether the purchases are for resale at retail or leases or resale at wholesale

Step 7: Enter the name, address, title, and signature of the buyer.

If, at any time, the percentage of purchases for resale changes, the certificate should be updated.

Hawaii Resale Certificate FAQs