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4% tax is nothing in comparison to many places - try 8% in New York !!! So this really is a bargain for many people. ..
Everything is taxed at 4.166% (Oahu is slightly higher) You are even taxed on doctor visits! ALL services are taxed! Even wholesalers are taxed to make another wholesale! It all adds up. Taxes upon taxes upon taxes.
State tax refunds aren't going to be distributed until July, I think it was. So, once they get the taxes, they hang onto them as long as they can. Even with all the taxes, the state is still broke. The miscellaneous fees for things are now going up and the amount of services is going down.
Thank you all for your comments. I am glad to hear all of the replies coming in, giving me different view points about this issue. From what I'm reading, gas seems to be more expensive then here on the mainland, but depending on the way that you adapt, you can buy groceries for around the same ballpark figure that you would get on the mainland (mine being NY of course...). So if food and gas (although a little bit more expensive then here on the mainland) are still around the same, then where does the really expensive cost that I keep hearing about figure in? I can see that if you adapt to any situation that you will be able to keep your bills relatively low, but if that is the case, then why do I hear all the time about Hawaii being so expensive to live in? I understand that housing is very expensive, (however this will not be a problem as I will be renting), but where does this expensive living figure in? Is there any hidden costs that I don't know about that you can inform me about? Thanks!
Gas is $3.42 a gallon today in Hilo. It is probably almost $1 less where you are on the mainland.
You are correct that housing is expensive - IF you buy. That being said, housing prices are way down on the Big Island and rents are also dropping. Recent news articles point out foreclosures hit another record high in January on the Big Island.
Any one specific cost is not a whole lot higher than on the mainland - perhaps with the exception of rent, electricity and maybe gasoline. However, all of your other expenses will be just a tiny bit higher - 5% to 25% - than on the mainland. However, the wages are a lot lower - 10% to 50% for comparable work - so between those two things, folks slowly go broke around here. These are just averages, though, perhaps you aren't an average person so the numbers will be different for you. Everyone's experience is different, that's one thing that keeps it interesting.
Everything is taxed at 4.166%
so, if your rent is 1,000 a month, does the landlord charge the additional General Excise Tax, and that makes it 1,000 + 4.166% of 1,000 (1,041.66) - or is that factored in, or does it vary from landlord to landlord? Just curious.... i realize rents are not that cheap too, just trying to keep the question simple....
I disagree that NYC prices are even with HI prices on food. The everyday NYC prices are about the same as HI if you are looking only at Hawaii specials compared to NYC everyday prices. Its not rocket science to check the facts. You can look at Safeways ads for HI and compare it to Dagastinos. Dagastinos website lets you check the prices of items as they are on the shelf (go to shop by aisle). The Dagastinos prices may be lower, or even and in some cases a little higher, but that is the everyday non-sale or special price. When you check the special ad the prices are almost always lower.
You may be able to get some thing a bit cheaper on Hawaii but day in and day out the prices will be a little higher across the board. All those nickles and dimes adds up. You cant keep looking at Hawaii Sales prices compared to NYC regular prices, compare apples to apples. If you look at a Hawaii sale price, what is that same item in NYC when on sale? That is like saying its cheaper to fly to hawaii than fly same miles on the mainland because your using advance purchase economy fare for Hawaii and using last minute first class fare on the mainland.
I think its fair to compare sale prices in Hawaii to regular prices elsewhere if that's what you're paying either place. Its not like everyone who moves to Hawaii lives in the exact same manner that they did on the mainland.
I'd argue that it actually makes /more/ sense to compare Hawaii sale prices to regular mainland prices. Whenever anyone is asking about moving to the islands, everyone's first response here is "EXPECT CHANGE. Don't try to do everything like you did on the mainland, or you're sure to hate it and move back." Given that, I don't know why you'd expect that everyone that moves here would eat the exact same things that they did in NYC or Wichita, KS or whatever.
Everything is taxed at 4.166%
so, if your rent is 1,000 a month, does the landlord charge the additional General Excise Tax, and that makes it 1,000 + 4.166% of 1,000 (1,041.66) - or is that factored in, or does it vary from landlord to landlord? Just curious.... i realize rents are not that cheap too, just trying to keep the question simple....
Most always. You will usually see the phrase "GET not included" or similar. That means - add the extra for the tax.
The Hawaii GE tax ("General Excise tax") is not a true 'sales tax' like the sales taxes in most states. In other states, like NY for example, the seller is merely a collector, a conduit to collect the tax from the purchaser (who technically must pay it) and pay it over to the government. So, for example, in many states a seller cannot represent to the buyer that something is being sold "with no tax". They CAN say "tax included" in the price, but they must by law collect a specific tax, from the buyer, on everything sold (with exceptions, of course, such as people who have the right paperwork proving that they are buying for resale, charities that might be 'tax exempt', or certain items that are not subject to tax, e.g., food in many places).
Hawaii's GE tax is different. It is not a tax on the buyer, but on the seller. The seller (or provider of service) must pay a certain percentage of its gross revenue (i.e., amount taken in from sales) (with a few deductions, most of which don't affect most businesses) over to the government. For retail sales and services, it's 4%. For 'wholesale' goods and services, it's 0.5%. It is TOTALLY up to the seller whether it advertises a price "plus tax", includes the tax in the price, etc. But if I want to get $100 for an item, I have to charge not $104 (as would be the case if I were calculating a tax to be paid by the buyer at 4% of the $100 price), but $104.16667 (probably $104.17), because I will be paying 4% of the TOTAL that I collect (4% of $104.17 is $4.17, roughly).
It's charged on everything, because all businesses (pretty much) must pay it on all of their revenue, whether that is from sales of products, provision of services, etc. A business might raise its "price" to cover the tax burden (just like any other piece of overhead a business must pay, such as rent, insurance, office supplies, etc.), so I might sell my item for $105 and not worry about a separate tax addition (in which case I still have to pay over the govt. 4% of $105), or it can advertise a lower price "plus tax". Usually the latter is more competitive (someone looking at one store and seeing $100 [plus tax] versus $104 at another, would probably not realize that the latter is less, because they are used to all prices being 'before tax', especially if they come from a mainland state with a traditional sales tax. So that's why, I think, most businesses advertise prices "plus 4.1667% tax".
And, as I said, the tax paid by wholesalers is 0.5%. So it is cumulative at every step of the distribution chain (unlike a traditional sales tax, which is typically paid only by the end-user purchaser), but NOT at the 4% rate, as some people might think. If you have an item that sells for $100, the manufacturer might have to pay $25.13 for the raw materials, instead of $25. For a $25 profit, he'd then have to charge $50.38 for it (and pay 25 cents tax, netting $25 profit after buying the materials and paying the tax), then the distributor might charge $75.76 (and pay 38 cents tax, netting a $25 profit after paying .38 tax and $50.38 for the item), then if the retailer wants a $25 profit he would have to charge $104.96. He'd pay $75.76 for the item and $4.20 in tax, netting his $25 profit. The end user is then paying a total of $4.96 in tax.
So you see that the cumulative effect of the tax at all levels does add something, but still does not (unless there are more levels than this) bring it up to the 8% sales tax paid in NY. With county and local taxes, most states are well over 5% (though a few are still at that level).
Food is exempt in many states (though not all), and prescription drugs in almost all, including Hawaii (according to one source I found on the internet). I guess this means the seller does not have to pay the 4% on revenue earned from those sales.
I think its fair to compare sale prices in Hawaii to regular prices elsewhere if that's what you're paying either place. Its not like everyone who moves to Hawaii lives in the exact same manner that they did on the mainland.
I'd argue that it actually makes /more/ sense to compare Hawaii sale prices to regular mainland prices. Whenever anyone is asking about moving to the islands, everyone's first response here is "EXPECT CHANGE. Don't try to do everything like you did on the mainland, or you're sure to hate it and move back." Given that, I don't know why you'd expect that everyone that moves here would eat the exact same things that they did in NYC or Wichita, KS or whatever.
Hogwash. Cost of Living is comparing A to A, B to B, and C to C. Not A to A, B to b, and C to b with a bit of C. If I move to Hawaii and because I can't afford electricity like I did in NYC so don't turn on lights and stuff does that mean Hawaii electricity is cheaper than NYC? No, it means I use less because the cost is higher. If I walk to work because gas is higher in Hawaii than NYC does that mean Hawaii gas prices are cheaper? You are talking your BUDGET, not cost of living. Sounds like your trying to fake the cost of living in your mind to match your expenses so you claim cost of living is lower. Its because the cost of living is higher that you must change your spending habits. Otherwise, you should be doing the exact same thing spoending the exact same ways and not worry about change.
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About the Hawaii GE tax
