Maui Business

Maui County has Lowest Tax Burden in Hawaiʻi

June 22, 2015, 12:37 PM HST
* Updated June 22, 12:40 PM
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Hawaii taxesBy Maui Now Staff

The weight of the tax burden varies across different states and counties across the country.

The chart below shows that Maui County’s tax burden ranks lowest against other counties in the state.

Rank County Income Tax Sales Tax Property Tax Fuel Tax Tax Burden Index
1 Maui $10,454 $624 $420 $291 73.59
2 Kauaʻi $10,454 $624 $585 $293 72.04
3 Hawaiʻi $10,454 $624 $627 $257 71.98
4 Honolulu $10,454 $702 $733 $277 70.10

 

A recent study by SmartAsset calculated the amount of money a specific person would pay in income, sales, property and fuel taxes in each county in Hawaiʻi, and ranked them lowest to highest in terms of tax burden.

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To better compare income tax burdens across counties, SmartAsset used the national median household income. SmartAsset then applied relevant deductions and exemptions before calculating federal, state and local income taxes.

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In order to determine sales tax burden, SmartAsset estimated that 35% of take-home (after-tax) pay is spent on taxable goods. SmartAsset then multiplied the average sales tax rate for a county by the household income less income tax. This product is then multiplied by 35% to estimate the sales tax paid.

SmartAsset divided each county’s median property tax paid by median property value to determine the median property tax rate by county. SmartAsset then applied this rate to a hypothetical $250,000 property in each county to calculate a representative property tax paid.

For fuel taxes, SmartAsset first distributed statewide vehicle miles traveled down to the county level using the number of vehicles in each county. SmartAsset then calculated the total number of licensed drivers within each county. The countywide miles were then distributed amongst the licensed drivers in the county, which gave us the miles driven per licensed driver. Using the nationwide average fuel economy, SmartAsset calculated the average gallons of gas used per driver in each county and multiplied that by the fuel tax.

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SmartAsset then added the dollar amount for income, sales, property and fuel taxes to rank the counties. For each of the more than 3,300 counties in the nation we determined the tax burden a person who makes the national median household income with a $250,000 house who spends 35% of take-home pay on taxable goods and drives a weighted number of miles per year.

For more information on SmartAsset’s index and methodology, go online.

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