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  • Question regarding General Excise Tax and rent

    My Question is.

    When you guys pay rent, do you pay GE tax ON TOP OF your rent, or is it included in the price of your rent ?

    ie: Your apartment costs $1000 a month. Do you pay $1000 PLUS the GE tax, or do you just pay $1000 ?
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  • #2
    Re: Question regarding General Excise Tax and rent

    If the tax is included in the rent no one has ever said it. And none of the landlords I dealt in the past have said to add the tax with rent I am paying them (in your example, if the rent is $1,000 I am paying $1,000 and not $1,045).

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    • #3
      Re: Question regarding General Excise Tax and rent

      I have no idea what landlords or property management companies are doing on their end as far as accounting goes (because of course they're paying taxes of some kind), but as Helen says, if my rent is $1200, that's what I write the check for. Part of the reason for the simplicity may be that you're generally not invoiced for rent!

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      • #4
        Re: Question regarding General Excise Tax and rent

        You pay whatever your rental contract says you agreed to pay when you signed it. I don't know of any landlords who put a line item for GET into their rental contracts, although I suppose they could. The thing is, GET isn't something that you the tenant are legally responsible for paying. GET is paid by the person who receives the payment, i.e. the landlord. If the GET isn't paid to the state, it's the landlord who is in trouble, not the tenant.

        When you're purchasing an item at a store, the store is required to pay GET for the revenue it receives. Almost every merchant passes this cost on to the customer by explicitly including an item on your bill labeled "tax"... but it's really not your legal responsibility as the buyer to pay the GET. What you're paying is an extra charge that's added to the implicit contract between you and the merchant.

        There are a few merchants who do not charge an explicit GET. Every now and then I'll buy something that's marked, say, $5.00 -- and the merchant just takes $5.00 for it! I don't know whether he's folding the tax into his cost, like landlords do for their tenants, or if he's not paying the tax at all. But that's his problem.

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        • #5
          Re: Question regarding General Excise Tax and rent

          Also keep in mind that the Hawaii excise tax rate was increased recently in January 2007 from 4.166% to 4.712%, which in itself has impacted rents and other high-end consumer prices considerably.

          As for businesses selling goods "tax included", Teddy's Burgers practiced this up until only recently. The price you seen on the menu board was exactly what you paid. Which means they've already factored the excise tax into the price of each item. So you're still "paying" the tax, but just not seeing it added over a subtotal.

          Their menu is (or was?) small enough to make that a reasonable task on the book keeping end, and I suspect makes it look "friendlier" (cheaper?) to customers. Perhaps easier on the cashiers too.

          But now they've changed it (for whatever reason) to a "plus tax" system. Perhaps due to franchising operations that they're now going into.

          Wow, I just noticed my blog's entry of them is listed as an "official" review on Teddy's website.. cool!

          Why can't we just round everything out at least to the nearest quarter (25 cents) already? Get rid of pennies, nickels and dimes. I'm tired of finding those under my car seat. lol
          Last edited by Pomai; October 3, 2007, 04:30 PM.
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          • #6
            Re: Question regarding General Excise Tax and rent

            Originally posted by Pomai View Post
            Why can't we just round everything out at least to the nearest quarter (25 cents) already? Get rid of pennies, nickels and dimes. I'm tired of finding those under my car seat. lol
            I heard that at the military base exchanges, they've done away with pennies -- everything gets rounded to the nearest nickel.

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            • #7
              Re: Question regarding General Excise Tax and rent

              In my experience and understanding, a LL is required to pay GE tax, and therefore can carry that charge over to the "customer" in this case a "resident." However, it must be stated in the lease, if it doesn't, then the LL is required to send a minimum of 45 day notice to the resident prior to the increase.

              Refer to Chapter 521 HRS for precise information.
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              • #8
                Re: Question regarding General Excise Tax and rent

                I've never heard of tenants paying GET. I think the vast majority of landlords just raise the rental contract a bit to handle the 4.5% on top of property taxes and other expenses.

                Originally posted by Pomai View Post
                Why can't we just round everything out at least to the nearest quarter (25 cents) already? Get rid of pennies, nickels and dimes. I'm tired of finding those under my car seat. lol
                If we pay with a credit card, does it matter what the last digit is?

                Our family finds enough spare change while walking around (sidewalks, parking lots, streets, and particularly on the grounds of the local high school) to pay for one or two Costco pizza dinners a year. Even on our regular evening walk, a route we take a couple times a week, we'll find 5-25 cents.

                One day our kid's gonna take the metal detector up to the high school and really clean up, so to speak...
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                • #9
                  Re: Question regarding General Excise Tax and rent

                  Originally posted by Nords View Post
                  Our family finds enough spare change while walking around (sidewalks, parking lots, streets, and particularly on the grounds of the local high school) to pay for one or two Costco pizza dinners a year. Even on our regular evening walk, a route we take a couple times a week, we'll find 5-25 cents.

                  One day our kid's gonna take the metal detector up to the high school and really clean up, so to speak...
                  The best time and place to find dropped money is Sunday morning in the parking lots of bars and nightclubs.

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