Selling a business in Hawaii: what the state takes (2026)
Hawaii’s top individual income tax rate is 11%. Here is what an owner selling company stock pays, with 2026 rules from official sources and worked examples at $10 million, $25 million and $50 million.
- 11%
- Top Hawaii income tax rate (2026)
- $1,812,500
- State tax on a $25M long-term gain
- 31.1%
- Combined federal and state rate on $25M
- 12 of 51
- Rank by total tax on $25M (1 = highest)
How Hawaii taxes a business sale
- Income tax
- Top rate 11%: Over $325,000 (single) for 2025-2026; ordinary income only, long-term capital gains are capped at 7.25%.
- Long-term capital gains
- Net capital gain is taxed at an alternative maximum rate of 7.25% (HRS 235-51(f)): ordinary income is taxed on the regular schedule and the gain above it at 7.25%. Ordinary income still reaches 11%.
- Entity-level taxes
- S corporations generally pass income through to shareholders.
- Local taxes
- No local income taxes.
Three worked examples
| Long-term gain | $10,000,000 | $25,000,000 | $50,000,000 |
|---|---|---|---|
| Federal capital gains tax (20%) | $2,000,000 | $5,000,000 | $10,000,000 |
| Net investment income tax (3.8%) | $380,000 | $950,000 | $1,900,000 |
| Hawaii tax | $725,000 | $1,812,500 | $3,625,000 |
| Total tax | $3,105,000 | $7,762,500 | $15,525,000 |
| Effective combined rate | 31.05% | 31.05% | 31.05% |
| Net proceeds after tax | $6,895,000 | $17,237,500 | $34,475,000 |
| Extra tax versus Texas | $725,000 | $1,812,500 | $3,625,000 |
Seller’s tax calculator
Estimate federal and state tax on a stock sale and what is left before fees and debt.
- Long-term capital gain
- $25,000,000
- Federal capital gains tax (20%)
- $5,000,000
- Net investment income tax (3.8%)
- $950,000
- Hawaii tax
- $1,812,500
- Taxable gain at 7.25%
- $1,812,500
- Total tax
- $7,762,500
- Effective rate on the gain
- 31.05%
- Net proceeds after tax
- $17,237,500
Illustration, not tax advice. Assumes a resident individual, the whole gain long-term, top marginal rates, no state credits, installment terms, QSBS exclusion or other planning, and no local taxes. Net proceeds are before transaction fees, debt repayment, escrows and earn-outs. Rates are for tax year 2026 where published; see the methodology.
Compare with other states
Common comparisons
- California37.1% combined, $15.72M net
- New York34.1% combined, $16.48M net
- Texas23.8% combined, $19.05M net
- Florida23.8% combined, $19.05M net
- Nevada23.8% combined, $19.05M net
- Washington33.5% combined, $16.63M net
- Tennessee23.8% combined, $19.05M net
Methodology and sources
Hawaii figures are for tax year 2026. HRS 235-51(c) schedule for taxable years beginning after December 31, 2024 (as amended by Act 46, 2024) applies to 2026. Act 24 (SB 3125, 2026) adds a 13% bracket over $500,000 (single) only from 2027 and does not change the 7.25% capital gains rate. The examples assume a resident individual selling privately held stock for a long-term gain equal to the sale price (zero basis), with every dollar taxed at the top marginal rates, the federal 20% capital gains rate and the 3.8% net investment income tax, and no planning, credits or local taxes. Full assumptions are in the report methodology.
All 50 states and DC with source URLs.
- 1HRS 235-51 (rate schedules and capital gains alternative tax, subsection (f))
- 2SB 3125 CD1 (2026), enacted as Act 24: new brackets from 2027
- 3Honolulu Star-Advertiser, Hawaii's new millionaire tax (Act 24 signed May 21, 2026; 2026 top rate still 11%). Secondary source
- 4Tax Foundation, State Individual Income Tax Rates and Brackets, 2026. Secondary source
Data last updated October 26, 2026.
Cite this research
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Citation
Laurent Capital Research, “The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): Hawaii,” 2026, https://laurent.capital/research/seller-tax-map/hawaiiLink (HTML)
<a href="https://laurent.capital/research/seller-tax-map/hawaii">The Seller’s Tax Map: What Selling a Business Costs in Every State (2026): Hawaii</a> (Laurent Capital)Planning a sale and weighing the tax cost?
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