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Starting a business in Hawaii will mean potentially registering with a number of federal, state and local agencies. Let’s take a look at common licenses and permits a business will register for in Hawaii.
Business License – There is no general state of Hawaii business license, however many cities 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 cities 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.
Employer Identification Number (EIN) – Many businesses will register with the Internal Revenue Service (IRS) for an EIN or Employer Identification Number. The EIN is the business equivalent for a Social Security Number for an individual. Corporations, Limited Liability Companies, Partnerships and Sole Proprietorships with employees will all need to register for one. Sole Proprietorships without employees can use the owner’s Social Security Number.
There is no cost for an EIN and it only takes a few minutes to get.
Hawaii Tax Identification Number – Any entity that conducts business within Hawaii is required to register for the BB-1 Form – 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 Department of Taxation, with the most common being the General Excise Tax (GET) license. There is a $20 one-time registration fee.
Hawaii does not have a sales tax but instead has the General Excise Tax. Businesses located in Oahu County may also be subject to the Oahu County Surcharge Tax.
Resale Certificate – Businesses purchasing merchandise to resell will usually want to obtain a Hawaii Resale Certificate in order to not pay sales tax for merchandise that is being resold to customers.
Professional License – A variety of professions in the state are regulated and need to be registered before offering certain services. A few common 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.
Trade Name Registration – While not a business license, it’s common for Sole Proprietorships and Partnerships operating under a name that is different from the full name of the owner(s) to register for a Trade Name (also known as a Doing Business As or DBA) with the Department of Commerce and Consumer Affairs.
These are a few of the most common business licenses, but there are way too many licenses and permits in Hawaii for us to keep track of. Before starting your business, check with the City Hall, County Clerk, Chamber of Commerce and/or Economic Developer in your area to get more information regarding business licensing. Additionally, there are companies like IncFile or CorpNet that can do the research to ensure you have the proper federal, state and local licenses.