eBay collects Hawaii's General Excise Tax on the retail sale. That's not the only leg of the transaction Hawaii taxes.

The Bottom Line for Hawaii eBay Sellers

Forming an LLC does not change what Hawaii's Department of Taxation thinks you owe on your eBay sales. It changes who owes it. What makes Hawaii unusual is that the underlying obligation is not the conventional "does the marketplace collect for me" question this cluster answers for most states. Hawaii's General Excise Tax is levied on the seller, on gross income, and the department's own guidance treats your side of a marketplace sale as a distinct wholesale transaction from the one eBay already collected on at retail.

Most states with a sales tax ask a buyer-facing question: did the marketplace collect and remit on the purchase. Hawaii's GET doesn't work that way. It's a privilege tax on the privilege of doing business, measured against the seller's own gross proceeds, and it has no buyer-facing exemption concept at all. Act 2 (2019) deems eBay the retail seller for collection purposes on the sale to your customer, at the general excise rate. The same statute simultaneously deems you, the underlying marketplace seller, to be making a wholesale sale of that same merchandise to the facilitator. Wholesale gross proceeds are still gross income under Hawaii's tax code, and nothing in the statute carves marketplace transactions out of that definition. eBay's compliance on the retail leg says nothing about your own wholesale-leg liability.

Whether you need your own Hawaii registration depends on the rest of your business: Registration for a GET license is required only if the marketplace seller is 'engaged in business' in Hawaii. I.e., has physical presence in the state, or (absent physical presence) meets the Act 41 economic threshold of $100,000 or more in gross income sourced to Hawaii or 200 or more transactions with Hawaii parties in the current or prior year, counting sales made through a marketplace facilitator that is itself engaged in business in the state.. Your eBay sales count toward Hawaii's $100,000 or 200 transactions threshold, so marketplace volume alone can push you over it. Hawaii uses the federal reporting threshold, so eBay issues a 1099-K once you pass $20,000 and 200 transactions.

eBay Collects Hawaii Sales Tax. What Is Still Yours?

Whether you need your own Hawaii registration depends on the rest of your business: Registration for a GET license is required only if the marketplace seller is 'engaged in business' in Hawaii. I.e., has physical presence in the state, or (absent physical presence) meets the Act 41 economic threshold of $100,000 or more in gross income sourced to Hawaii or 200 or more transactions with Hawaii parties in the current or prior year, counting sales made through a marketplace facilitator that is itself engaged in business in the state..

The trigger for actually owing anything is whether you are "engaged in business" in Hawaii, which the tax department defines as either physical presence in the islands or crossing Hawaii's own economic-activity thresholds counting sales made through a facilitator that is itself engaged in business in the state. A seller working from a garage on the mainland, listing exclusively on eBay and never setting foot in Hawaii, owes nothing under this rule until that volume test is met, below it, there is no GET license to hold and no wholesale-rate liability to calculate, no matter how the department later characterizes the wholesale leg of the transaction. Above it, registration and the wholesale-rate GET liability both switch on together, and eBay's own retail-rate compliance does not offset either one. This is the opposite of the typical marketplace-facilitator story where crossing a state's threshold is largely academic for a marketplace-only seller, in Hawaii it is the entire question.

Do Your eBay Sales Count Toward Hawaii's Nexus Test?

Your eBay sales count toward Hawaii's $100,000 or 200 transactions threshold, so marketplace volume alone can push you over it.

Because wholesale-classified receipts from your eBay sales still count as your own gross income under Hawaii's tax code, they feed directly into the same volume test that decides whether you're engaged in business here in the first place. There's no separate, lower bar for the wholesale leg. A seller who also sells directly to Hawaii buyers off eBay, or wholesales overstock to another business, adds those receipts to the same running total. Track your Hawaii-bound volume across every channel from day one rather than treating it as a question you'll answer once a form shows up, because by the time a 1099-K arrives you may already be well past the point where the wholesale-rate question needed an answer.

Hawaii's 1099-K Threshold

Hawaii uses the federal reporting threshold, so eBay issues a 1099-K once you pass $20,000 and 200 transactions.

Hawaii's Department of Taxation requires the federal form as-is for annual information-return purposes and doesn't layer an independent dollar or transaction figure of its own on top of the federal test, the form N-196 instructions single out several federal information returns Hawaii declines to require, and Form 1099-K is conspicuously not among them, meaning the federal trigger is what actually determines when eBay reports your activity. A 1099-K crossing your desk in Hawaii carries the same caveat it carries everywhere: it reports gross payment volume to the IRS, not your GET liability, and it says nothing about whether you separately owe the wholesale-rate excise tax discussed above. Sellers who assume a 1099-K and a GET bill are the same conversation are conflating two entirely different tax systems that happen to both key off your sales volume.

Buying Inventory to Resell in Hawaii

Hawaii will not accept an out-of-state resale certificate, buying inventory tax-free here means holding a Hawaii permit of your own.

Hawaii's GET is not a traditional retail sales tax exemption system. It is a tax on the seller's gross business income, and the 'resale certificate' (Form G-17) is a mechanism to buy at the lower wholesale GET rate rather than a full tax-free exemption. Form G-17 itself requires the purchaser to state they are 'the holder of Hawaii Tax Identification No. GE', an out-of-state permit number cannot be substituted. This CONFIRMS the commonly-reported position that Hawaii will not honor another state's resale certificate.

Hawaii's resale mechanism runs entirely through its own tax ID: the state's resale certificate requires the purchaser to state a Hawaii-issued general excise tax license number, not any out-of-state registration, so a supplier here won't extend wholesale pricing on the strength of an LLC filed elsewhere or a permit from your home state. If you buy inventory from a Hawaii-based wholesaler, expect to be asked for that number directly, and expect the answer to be no substitutes. Separately, general secondhand resale of used merchandise isn't governed by any single Hawaii statute. The state's professional licensing division runs roughly fifty license categories and has no secondhand-dealer or pawnbroker board among them, leaving that kind of licensing to individual counties. Hawaii County and Honolulu each run their own secondhand-dealer licensing process, so a reseller flipping thrifted goods needs to check the specific county the business operates from rather than assume a single statewide answer covers the whole state.

Hawaii leaves second-hand dealer licensing to cities and counties, so check your own. No statewide secondhand-dealer license exists. Hawaii's Department of Commerce and Consumer Affairs Professional & Vocational Licensing (PVL) division licenses ~50 professions/trades statewide (contractors, real estate, private detectives, motor vehicle industry, etc.) but has no 'secondhand dealer' or 'pawnbroker' board or license category. Second-hand dealer licensing is instead issued by individual counties: e.g., Hawaii County issues a 'Second Hand Dealer's License' through its Business & Occupation Licensing office, and Honolulu issues its own business license covering secondhand/pawn dealing. This is a county-by-county licensing scheme, not a statewide statute reaching general resale.

The Hawaii Tax eBay Does Not Handle

Hawaii levies General Excise Tax (GET), which can still reach you even though eBay handles the sales tax: GET reaches a marketplace-only eBay seller only once the seller is 'engaged in business in the State', either through physical presence in Hawaii, or, absent physical presence, by meeting the Act 41 (2018) economic nexus thresholds of gross income sourced to Hawaii of $100,000 or more, OR 200 or more transactions with parties in Hawaii in a calendar year. Per Department guidance (TIR 2019-03, Rev. 12/19/2019), a marketplace seller determines whether it meets these thresholds by combining (a) its own direct sales into Hawaii, (b) sales of tangible personal property through any marketplace facilitator if the seller sends the property into the state (directly to the purchaser or to the facilitator for resale), and (c) sales of intangible property/services ultimately used or consumed in Hawaii, regardless of channel. Once engaged in business, the seller must hold a GET license and owes GET at the wholesale rate of 0.5% on the sale of tangible personal property it makes through the marketplace facilitator to a retail purchaser in Hawaii (or on TPP delivered to the facilitator in-state before the retail sale); this applies even though the facilitator itself separately owes and collects GET at the 4%-plus-surcharge retail rate on the same transaction. The wholesale rate is NOT available for sales of intangible property (only for TPP and services, per HRS §237-13(2) and (6); §237-13(9) has no wholesale-rate provision for intangibles).

Setting Up to Sell on eBay from Hawaii

1. Track your Hawaii-bound gross income across every channel

   Because GET measures gross income rather than buyer-facing sales, you need a running total of everything sold to Hawaii addresses, marketplace and otherwise, from the day you start selling, not from the day a form arrives.

2. Form the LLC before your volume answers the engaged-in-business question

   The entity is what separates a GET dispute or a supplier contract from your personal assets. Filing while volume is still low is simpler than retrofitting a business structure after the wholesale-rate question has already turned live.

3. Register for a GE license once you cross the engaged-in-business line

   eBay's own retail-rate compliance does nothing for your separate wholesale-rate obligation. Once your gross income crosses Hawaii's threshold, register directly with the Department of Taxation rather than assuming the marketplace's paperwork covers you.

4. Get a Hawaii GE license number before buying wholesale locally

   A Hawaii supplier's resale exemption runs on the state's own tax ID, not an out-of-state permit or your LLC's formation paperwork. Apply for the number before it becomes the thing holding up an inventory order.

5. Check your county's secondhand-dealer rule if you resell used goods

   Hawaii has no statewide license for general secondhand resale. Hawaii County and Honolulu each run their own. Confirm which county's rule applies to your business location before assuming none does.

Who to Ask in Hawaii

The Hawaii Department of Taxation is the office that administers GET registration, the wholesale-versus-retail rate question, and any dispute over engaged-in-business status. Start there for anything specific to your volume and channel mix. The Department of Commerce and Consumer Affairs runs the state's professional and vocational licensing boards but, notably, has no secondhand-dealer category, so that question routes instead to whichever county your business operates in, Hawaii County's Business & Occupation Licensing office for the Big Island, or Honolulu's business licensing process for Oahu. None of these offices share records with each other or with the Department of Commerce and Consumer Affairs' business-registration division that actually forms your LLC, so each filing has to be made and tracked on its own.

Sources

• https://files.hawaii.gov/tax/legal/tir/tir19-03_rev2.pdf
• https://files.hawaii.gov/tax/legal/hrs/hrs_237.pdf
• https://files.hawaii.gov/tax/legal/brochures/GE_brochure-25.pdf
• https://files.hawaii.gov/tax/forms/current/n196.pdf
• https://www.law.cornell.edu/regulations/hawaii/Haw-Code-R-SS-18-235-96
• https://files.hawaii.gov/tax/forms/2016/g17.pdf
• https://cca.hawaii.gov/pvl/boards/
• https://www.vrl.hawaiicounty.gov/other-services/business-occupation-licensing/second-hand-dealer-s-license
• https://tax.hawaii.gov/geninfo/get/
• https://www.irs.gov/instructions/i1099k

Federal 1099-K threshold: IRC § 6050W(e), as amended by § 70432(a) of the One, Big, Beautiful Bill Act (P.L. 119-21, July 4, 2025). A third-party settlement organization such as eBay must file Form 1099-K only if BOTH tests are met for the calendar year: gross payments exceed $20,000 AND the number of transactions exceeds 200. These are the figures for tax year 2026. There is no forward phase-in: § 70432(a) takes effect "as if included in section 9674 of the American Rescue Plan Act," so the same $20,000 / 200 figures apply retroactively to calendar years after 2021 (tax years 2022 through 2026 alike). The $600 threshold enacted by ARPA § 9674 (P.L. 117-2) was repealed before it operated, and the IRS transition-relief thresholds previously announced for 2024 and 2025 are superseded. A platform may issue a 1099-K below these figures, and a state may set a lower TPSO threshold, in which case a seller can receive a 1099-K without meeting the federal test.. Verified 2026-08-08.