Honolulu’s New General Excise Surcharge Not A Slam Dunk

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Now that it seems that the Honolulu Mayor Mufi Hannemann and Governor Linda Lingle have come to a resolution over who will be collecting the General Excise Tax surcharge for mass transit, officials have discovered that the task will not be a slam dunk.

The casual observer may think that the surcharge can merely be tacked on to the current 4 percent. And that might be true but for the fact that only Honolulu will be levying the additional 0.5 percent.


This poses an interesting dilemma when goods and services are sold to or from Honolulu businesses as well as when goods and services are sold to consumers both in Honolulu and on the Neighbor Islands.

The question is what rate will apply in each of those situations? The