Understanding STR Taxes on Oahu

If you operate a short-term rental on Oahu, you are subject to multiple layers of taxation at both the state and county level. Understanding these taxes is essential for accurate financial planning and legal compliance. Failing to register for and pay these taxes can result in penalties, interest, and loss of your STR registration.

This is post four in our Oahu Short-Term Rental Guide series. For background on where STRs are legal and how NUCs work, see our zoning guide and NUC guide.

The Three Taxes Every Oahu STR Owner Must Pay

As an STR operator on Oahu, you are responsible for three separate taxes on your rental income:

  1. General Excise Tax (GET) – State tax on all business income
  2. Transient Accommodations Tax (TAT) – State tax on short-term lodging
  3. Oahu Transient Accommodations Tax (OTAT) – County-level tax on short-term lodging

Combined, these taxes total approximately 18.712% of your gross rental income. Here is how each one works.

General Excise Tax (GET): 4.712%

The General Excise Tax is Hawaii’s version of a sales tax, but it applies to all business gross income—not just sales to consumers. For Oahu STR operators, the effective GET rate is 4.712% (the base 4% state rate plus Honolulu’s 0.5% county surcharge, with a gross-up factor).

GET applies to all rental income, including:

  • Nightly rental rates
  • Cleaning fees
  • Non-refundable security deposits
  • Pet fees and other guest charges

Filing: GET is reported on Form G-45 (periodic) and Form G-49 (annual reconciliation). Filing frequency depends on your annual liability: monthly if over $4,000/year, quarterly if $1,000–$4,000, or annually if under $1,000.

Important: You are permitted to pass the GET on to your guests as a separate line item, and most STR operators do.

Transient Accommodations Tax (TAT): 11%

The Transient Accommodations Tax is Hawaii’s state-level lodging tax. As of January 1, 2026, the TAT rate increased from 10.25% to 11% under Act 96 (the “Green Fee” legislation). This increase is earmarked for environmental conservation and climate resilience programs.

TAT applies to gross rental proceeds from furnishing transient accommodations—any rental of less than 180 consecutive days. This means even monthly rentals between 30 and 179 days trigger the TAT.

Filing: TAT is reported on Form TAT-1, filed semi-annually (January 20 and July 20).

Key detail: You need a separate TAT license from the Hawaii Department of Taxation. Your GET license alone is not sufficient.

Oahu Transient Accommodations Tax (OTAT): 3%

The OTAT is a county-level tax imposed by the City and County of Honolulu on all transient accommodations on Oahu. It was established by Ordinance 21-33, effective December 14, 2021, at a rate of 3%.

The OTAT is assessed in addition to the state TAT. If you are registered with the State and have a valid TAT number, you are automatically deemed registered for OTAT—no separate county registration is required.

Filing: OTAT is reported on Form OTAT-1, filed semi-annually on the same schedule as the state TAT.

Combined Tax Rate Summary for Oahu STRs

Here is the full breakdown of taxes on your Oahu STR income as of 2026:

Tax Rate Applies To Filing Form
GET (with Oahu surcharge) 4.712% All rental income G-45, G-49
State TAT 11% Rentals under 180 days TAT-1
OTAT 3% Short-term rentals on Oahu OTAT-1
Total ~18.712%    

Example: Tax on $8,000 Monthly Rental Income

If your Oahu STR generates $8,000 in gross monthly rental income, here is what you owe:

  • GET: $8,000 × 4.712% = $376.96
  • TAT: $8,000 × 11% = $880.00
  • OTAT: $8,000 × 3% = $240.00
  • Total monthly tax: $1,496.96
  • Total annual tax: $17,963.52

This means nearly 18.7% of your gross rental income goes to taxes before you account for property taxes, insurance, maintenance, HOA fees, or mortgage payments.

Tax Licenses You Need

To legally operate an STR on Oahu, you must have:

  1. Hawaii GET License – Apply through the Hawaii Department of Taxation (Form BB-1)
  2. Hawaii TAT License – Obtained separately through the same department
  3. STR Registration – Registered with the Honolulu Department of Planning and Permitting (DPP)

The OTAT registration is automatic once you have your state TAT license.

Can You Pass Taxes on to Guests?

Yes. Hawaii law allows STR operators to pass GET, TAT, and OTAT costs on to guests. Most operators add these as a separate tax line item on their invoices or booking platform listings. Platforms like Airbnb and Vrbo may collect and remit some taxes on your behalf, but you are ultimately responsible for ensuring all taxes are properly paid and filed.

Important: If you pass GET on to guests, the amount collected is itself subject to GET (this is called “grossing up”). This is why the effective Oahu GET rate is 4.712% rather than a flat 4.5%.

What Happens If You Don’t Pay?

Failure to register for and pay required taxes can result in:

  • Penalties and interest on unpaid taxes
  • Loss of your STR registration with the DPP
  • Inability to renew your NUC (if applicable)
  • Enforcement action from both the State Department of Taxation and the City

Beyond Income Taxes: Property Tax

In addition to the income-based taxes above, STR properties on Oahu face significantly higher property tax rates compared to owner-occupied or long-term rental properties. For a detailed breakdown, see our next post: Oahu STR Property Tax Rates for 2025–2026.

Continue the Oahu STR Guide Series

This post is part of our comprehensive series on short-term rentals on Oahu. Explore the full series:

Need Help Understanding STR Taxes on Oahu?

Tax compliance is one of the most important parts of running a legal STR. If you are considering buying or selling a property with STR potential, our team can help you understand the full financial picture.

Contact Kristy and Austin to start the conversation, or visit our home buying page to learn more about purchasing property on Oahu. You can also explore listings in our featured communities including Ho’opili, Kapolei, Waikiki, and Ko Olina.