Tax Overview: Hawaii
Hawaii tax debts are handled by the Department of Taxation and can trigger liens, levies, and wage garnishments. The state technically offers an OIC but acceptance is nearly impossible. Payment plan terms are entirely case-by-case with no published standards — each case is assigned to an individual collector who sets the terms. Hawaii has no collection statute of limitations, meaning debts persist indefinitely. Wage garnishments are set at a high 35% rate.
Key Tax Facts
- OIC technically available but nearly impossible to get accepted
- Installment agreement terms are entirely case-by-case — each case assigned to an individual collector
- No published standard terms for payment plans
- Wage garnishments generally set at 35%
- Garnishment reduction possible with financial condition statement, 2 months of pay stubs, and 2 bank statements
- Conditional penalty waiver available — requires lump sum payment
- NO collection statute of limitations — debts persist indefinitely
- Hawaii uses a General Excise Tax (GET) instead of traditional sales tax — applies to nearly all business transactions
Common Tax Issues
The lack of standardized payment plan terms means outcomes depend heavily on which collector is assigned to the case
The 35% garnishment rate is one of the highest nationally and severely impacts take-home pay
No collection statute means Hawaii debts never expire — there is no waiting it out
OIC is essentially unavailable in practice despite being technically offered
Resolution Options in Hawaii
Payment Plans (Installment Agreements)
Entirely case-by-case. Each case assigned to an individual collector who sets terms. No published standards.
Offer in Compromise (OIC)
Available: Yes
Does NOT stop collections while pending
Technically available but nearly impossible to get accepted. Not a viable strategy.
Wage Garnishment
Rate: 35%
Can lift with payment plan: No
Can reduce amount: Yes
Submit financial condition statement plus last 2 months of pay stubs and 2 bank statements for reduction consideration.
Penalty Abatement
Available: Yes
Conditional waiver available — requires lump sum payment.
Bank Levy
Can release: No
Official Resources
How Tax Advocate Group Helps Hawaii Taxpayers
Whether you're dealing with the IRS, the Hawaii Department of Taxation, or both — we provide comprehensive tax resolution services to Hawaii residents and businesses.