A Hawaii Booking Paid in December 2025 Was Taxed at 10.25%. One Paid in January Was Taxed at 11%
· RKube Services
Hawaii's state TAT rose to 11% on January 1, 2026. Which rate applies to a December payment for a January stay, and what vacation rental owners file on TA-1, TA-2 and the GET return.
If you rent a condo in Kihei, a cottage in Kailua or a room in Hilo to guests for less than 180 days at a time, Hawaii taxes that rent twice at the state level. There's the transient accommodations tax (TAT), and there's the general excise tax (GET), and then your county adds its own TAT on top.
The state TAT rate went from 10.25% to 11% on January 1, 2026, under Act 96 of the 2025 session. For tax year 2026, that's the rate on every TA-1. Most owners noticed the higher number on their first 2026 return. Fewer noticed the timing rule that decides which rate applies to a booking paid in December and stayed in January, and that's where returns go wrong.
This guide walks through who files what, which rate applies to which dollar, the filing schedule for the TA-1 and the G-45, and a worked example for a Maui condo.
The two Hawaii (HI) state taxes on a short-term rental
| Transient accommodations tax (TAT) | General excise tax (GET) | |
|---|---|---|
| What it covers | Gross rental proceeds from stays of less than 180 consecutive days | Gross income from the rental, short-term or long-term |
| 2026 rate | 11% (10.25% before January 1, 2026) | 4% state plus a 0.5% county surcharge in all four counties, so 4.5% |
| Periodic return | Form TA-1 | Form G-45 |
| Annual return | Form TA-2 | Form G-49 |
| License | TAT license, on the same Form BB-1 as the GET license | GET license, one-time $20 registration fee |
| Expenses deductible? | No. Operating costs and management fees can't be deducted on the TA-1 | No. It's a tax on gross income |
| Source | TA-1 instructions (Rev. 2025) | DOTAX GET page |
The Department of Taxation (DOTAX) rental property page puts it plainly: a short-term rental owner registers for both a GET and a TAT license, files the G-45 and G-49 for GET, files the TA-1 and TA-2 for TAT, and also reports the rent on the Hawaii income tax return (Form N-11 for residents, N-15 for part-year residents and nonresidents).
The county TAT is separate. Each county imposes its own and it's paid directly to the county, not on the state TA-1. Check your county's finance department for its current rate and filing portal.
Which rate applies: the date the money arrives
DOTAX Announcement 2025-03 explains that the rate depends on your accounting method, not on the stay dates alone.
Hawaii presumes every TAT taxpayer is on the cash basis unless you can show, from your books, that you use accrual. On the cash basis:
- Rent actually or constructively received before January 1, 2026 is taxed at 10.25%.
- Rent received on or after January 1, 2026 is taxed at 11%.
So a deposit paid in November 2025 for a February 2026 stay was a 10.25% dollar. A balance paid on January 3, 2026 for a stay that ended December 30, 2025 is an 11% dollar.
On the accrual basis, the test is when the right to the income was fixed under the "all events" test. DOTAX says that happens at the earliest of three moments: the stay takes place, the payment is due, or the payment is made.
Passing the tax on to guests doesn't change any of this. The rate increase applies whether or not you add TAT to the guest's bill. If you do pass it on, DOTAX says to do it in a way that matches your accounting method.
The TA-1 instructions include a short worksheet for any period that mixes old and new proceeds: pre-2026 proceeds times 0.1025, plus 2026 proceeds times 0.11, with the total on line 15.
What counts as gross rental proceeds
The TA-1 instructions define gross rental proceeds as everything paid to you, in cash, goods or services, for furnishing the accommodation, with no deduction for operating costs. That includes mandatory resort fees and amounts received for arranging the stay.
A few items are left out of the TAT base under section 237D-1, per the TA-2 instructions:
- TAT you passed on to and collected from the guest.
- GET you passed on to and collected from the guest.
- Charges for guest amenities such as meals, beverages, phone calls, laundry and service charges.
- For accrual-basis owners, accounts written off as worthless for income tax purposes.
Some stays are exempt altogether and are claimed with a code in Part VII of the TA-1, including accommodations given free of charge, rooms for full-time post-secondary students, military personnel on permanent duty assignment to Hawaii, and certain low-income renters on government rent subsidies. Each exemption has to be listed by district: 1 for Oahu, 2 for Maui, 3 for Hawaii County and 4 for Kauai.
The filing schedule
| Your annual TAT | TA-1 frequency | E-file? |
|---|---|---|
| Over $4,000 | Monthly | Required |
| $4,000 or less | Quarterly allowed | Optional |
| $2,000 or less | Semiannual allowed | Optional |
Each TA-1 is due with payment by the 20th day of the month after the period ends. A January 2026 monthly return was due February 20. A quarterly return for January through March was due April 20.
The TA-2 annual return and reconciliation is due on the 20th day of the fourth month after your tax year ends, so April 20, 2027 for calendar 2026. An extension to file the TA-2 requires Form GEW-TA-RV-6, it isn't automatic, and it doesn't extend the time to pay. Once you've filed the TA-2 for a year, you can't amend that year's TA-1s.
GET runs on the same calendar. G-45 returns are due the 20th day of the month after the period, and the G-49 annual return is due April 20 for calendar-year filers. If you have rentals on more than one island, report the proceeds on separate district lines on the TA-1. For GET, multi-island businesses also attach Schedule G-75.
Owners whose TAT tops $100,000 a year must pay by electronic funds transfer.
Worked example: a Maui condo in 2026
A Kihei condo owner, cash basis, rents only to vacation guests and doesn't add TAT or GET to the guest's bill. In calendar 2026 the owner receives $72,000 in rent, all for stays under 180 days. One guest paid a $3,000 deposit in December 2025 for a March 2026 stay, and that deposit was reported on the 2025 returns.
| Item | Amount |
|---|---|
| Gross rental proceeds received in 2026 | $72,000 |
| State TAT at 11% | $7,920 |
| Same proceeds at the old 10.25% rate | $7,380 |
| Cost of the rate change | $540 |
| GET at 4.5% (4% state + 0.5% Maui surcharge) | $3,240 |
| Total state-level tax on the rent | $11,160 |
The December 2025 deposit stays at 10.25% because the owner received it before January 1. It doesn't get re-taxed at 11% when the guest arrives in March.
Because the TAT is over $4,000 for the year, this owner files the TA-1 monthly and electronically. The GET is under $4,000, so quarterly G-45 returns are allowed. Maui County's own TAT is filed with the county. Then the rent goes on the owner's Hawaii income tax return, and the federal return, where the expenses finally count.
If the owner had chosen to visibly pass on the taxes, the amounts collected for TAT and GET would come out of the TAT base, while the passed-on GET would still be part of gross income for GET. That's one reason a booking platform's default tax settings deserve a look before the first 2026 quarterly return, not after.
HI rules that catch owners off guard
Your property manager filing for you doesn't move the liability. DOTAX says the owner stays responsible for GET and TAT even when a manager or platform files and pays, and recommends asking for copies of the returns and payment confirmations.
Rent collectors report you. Property managers, booking platforms and rental agents file Form RCA-1 with DOTAX under sections 237-30.5 and 237D-8.5, and DOTAX uses those reports to send Rental Property Compliance notices. If you get one and reported the rent under an entity's license, reply with the license numbers and the entity name.
Your TAT license number has to appear in every ad, including online listings. The fine for leaving it off is at least $500 a day for a first violation, $1,000 a day for a second and $5,000 a day after that.
There's no statute of limitations for non-filers. DOTAX generally recommends that owners who never filed submit at least 10 years of back GET and TAT returns if the rental has run that long.
Penalties and interest
| Problem | Penalty (per DOTAX) |
|---|---|
| Late TA-1 or GET return | 5% of the tax per month or part of a month, up to 25% |
| Tax not paid within 60 days of a timely return | 20% of the unpaid tax |
| Monthly filer not filing electronically | 2% |
| Required EFT payer not using EFT | 2% of the tax |
| Doing business without a GET license | $500 fine ($2,000 for a cash-based business) |
| Interest | 2/3 of 1% per month on unpaid tax and penalties |
Common questions about HI TAT
Do I owe TAT on a 6-month lease? If the stay is 180 consecutive days or more, it's not a transient accommodation, so no TAT. You still owe GET on the rent.
Can I deduct the cleaning company or the platform fee on the TA-1? No. The TA-1 instructions say deductions allowed on your income tax return, such as operating expenses and management fees, aren't deductible for TAT.
What about the cruise ship part of Act 96? A federal appeals court order on December 31, 2025 blocked the cruise fare portion, and DOTAX Announcement 2026-01 says it won't enforce it until further notice. The 11% rate for everyone else took effect January 1, 2026 as planned.
I own the condo through an LLC. Whose license? Use the license of whoever reports the rent. If the LLC holds the GET and TAT licenses, the returns are filed under the LLC.
This guide is general information about Hawaii law as of October 2026, not tax advice for your situation. Check the current TA-1, TA-2 and G-45 instructions and your county's TAT rules before you file.
We keep the books and file the monthly TAT and GET returns for vacation rental owners in Hawaii and across the US: rkubeservices.com.