Medical & Dental Practices Bookkeeping in Hawaii

Registering to do business in Hawaii runs through the Hawaii Department of Commerce and Consumer Affairs, with tax accounts through the Hawaii Department of Taxation and employer accounts through the Hawaii Department of Labor and Industrial Relations. Hawaii treats these as wholly independent, so being in good standing with one says nothing about the others — and the sales tax account is the one that accrues a real balance while you are not looking.

Beyond sales tax, Hawaii levies the General Excise Tax (GET) on gross income from nearly all business activity, payable by the business, though it is commonly visibly passed on to customers. far broader than a sales tax. Services, commissions, rent, and wholesaling are all within scope, with wholesaling taxed at a lower rate than retail. County surcharges apply on top on some islands. The consequence for your books is direct: GET is calculated on gross income, so netting a platform fee or a subcontractor payment out of revenue understates the tax base. Recording revenue gross is not optional here. It is registered and filed separately from anything the Hawaii Department of Commerce and Consumer Affairs handles, and it accrues on revenue rather than on profit — so it is recorded as it builds, not discovered at year end.

Whether medical and dental practices services are taxable in Hawaii is the question that catches people out — states differ enormously, and several have been broadening what counts. The General Excise Tax applies to nearly all business activity including most services and wholesaling — far broader than a typical sales tax. We code service revenue separately from any product revenue so the treatment is explicit rather than assumed.