AdSense and General Excise Tax (Hawaii)

Questions about paying GE Tax in HI

[ThunderWhales]

So Hawaii has a GE tax, which is like a sales tax except it's levied on pretty much everything including services, not just goods.
However, the wording of the GE Tax is formulated with phrases such as "for the privilege of doing business in Hawaii" - it's all about business within the state.

My question would be how AdSense ties into this tax, and it would be super beneficial if anybody currently living in HI has already paid taxes on AdSense earnings and could explain the situation to me.

From what I'm seeing, I should only have to pay the GE tax for the portion of my traffic that came from Hawaii. I've actually called the state tax offices but the people I've talked to sound completely clueless, and obviously the whole GE Tax law was written decades ago with no regard for the internet age.

Would really appreciate some help from people who have dealt with AdSense and GE taxes before and can shed some light on this mess.

[IanCP]

You should speak with your friendly, local tax consultant/accountant

[ThunderWhales]

If I could easily do that I probably wouldn't have made this thread (I also make very little from AdSense, and I won't have to pay until next tax year so not in a rush at the moment and trying to see if I can figure this out without having to pay somebody).

[not2easy]

like a sales tax except it's levied on pretty much everything including services, not just goods

Generally speaking, an excise tax may be due when goods or services are sold. As an AdSense publisher, you are not selling either goods or services - you are publishing. You do not have customers, so how can you have excise taxes due if you earn a little income? Income tax is where it belongs, not excise taxes.

Note - I do not live in Hawaii but I do live where a type of "sales tax" is collected for "everything" and I use AdSense on some sites. My AdSense income is reported under Income, not sales. But you are not likely to be getting valid local tax information from a forum, sorry. Best bet for cheap tax answers would be your local tax agency's manuals. Good luck.

[IanCP]

trying to see if I can figure this out without having to pay somebody

Long experience always proves all too often that to be the most incredibly expensive option over the long term.

[LifeinAsia]

IMHO- the "sales" transaction is between Google and the advertiser. Google would probably argue that the "transaction" is taking place in California and therefore not subject to HI's GE tax, but that's between them and the HI tax board.

Going out on a limb, but I would argue that since Google reports your payments as income to the IRS, HI should treat the money you get from Google as income and apply the relevant income tax to your earnings, not GE tax.

Note- I am not a tax preparer (got out of that field 10+ years ago), nor do I play one on TV.

[ThunderWhales]

Thanks for the thoughts on this.
I'll look into finding an adviser for a solid answer as the time draws closer.

There's always this odd conflict of a citizen having the right to do everything possible to legally/legitimately lessen their tax burden and the state trying it's hardest to grab as much money as possible.