Before achieving statehood in 1959, Hawaii’s economy was dependent on the export of sugarcane, sandalwood, pineapple and whaling. However, over time, the tourism industry has grown to be the largest in the state. Over 10 million foreigners visited Hawaii in 2018 generating $2.08 billion worth of revenue, 133.1 million more than 2017.
Hawaii also has the second-highest tax burden in the US after New York. This contributes to higher commodity prices and an unfair business climate.
No one feels the brunt of this situation more than small business (SMB) owners who, combined with a high cost of living, are struggling to eke out a living on the islands of Aloha.
Here is a list of small business statistics from Hawaii:
- The islands of Hawaii are home to 135,567, representing 99.3% of all businesses in the state.
- 50.7% of the total workforce in the state are employed by small-scale enterprises, a total of 275,908 people.
- Self-employed people who run incorporated businesses in Hawaii have an average median income of $48,000. Those whose businesses are not incorporated have an average median income of $ 22,000.
- In 2018, Hawaii’s banks issued 31,571 loans below $100,000 to small businesses valued at $491.3 million.
- In the 4th quarter of 2018, 2,654 Hawaiians lost their jobs after the closure of 843 SMBs. During the same period, 1,079 businesses started up creating 3,669 new jobs.
- Hawaii does not have a general business license requirement for all businesses. Certain firms may be required to acquire permits from various state agencies. For example, a foundry may need an environment permit from the Hawaii Department of Health.
- All businesses in the state are required to get the Hawaii Tax Identification Number. This number registers a business for various tax licenses like the General Excise Tax License (GET), which is similar to a sales tax and is the most common in the state.
- Hawaii state law requires that every new business designates a Hawaii registered agent that will be available during regular business hours at a physical address within the state.
- SMBs in the accommodation and food services sectors account for 49.4% of the total private workforce in the same sector.
- There are 684 small firms in the export business that account for 65.6% of Hawaii’s $457.0 million worth of revenue in total exports.
- Corporations in Hawaii are subject to a corporate income tax with rates ranging from 4.4% to 6.4%.
- The state tax returns are due on the 20th day of the fourth month after the close of the tax year. If your tax year corresponds with the calendar year, this means returns are due on April 20th.
- Revenue from partnerships is distributed to the individual partners and is then taxed at both local and federal levels.
- Hawaii’s utility industry has the smallest share of SMBs compared with other industries with only 208 small firms currently working in it.