Can businesses charge GET to tax‑exempt organizations such as nonprofits, government agencies, and credit unions?

Yes. Sales to tax-exempt customers are generally subject to GET. There are no GET exemptions based on a customer’s tax-exempt status. As a result, we do not issue tax exemption certificates to tax-exempt organizations, government agencies, or credit unions to exempt their purchases from Hawaii businesses. 

Many nonprofit and religious organizations like universities and churches are exempt from federal and state income taxes, but since the GET is imposed on businesses and not customers, sales to these organizations are subject to GET. Therefore, a business may charge GET to a tax-exempt organization when the organization makes purchases from the business. Similarly, sales to (federal, state, and county) government agencies including the military and credit unions are also generally taxable; however, if a business sells goods to the federal government or a credit union, the sale is exempt and the business may claim a deduction (see the GET return instructions for more information).