On August 10, 2021, the Hawaii Department of Taxation issued Tax Information Release No. 2021-06, clarifying the treatment and taxability of software sales under Hawaii’s general excise tax (GET). According to the Information Release, the sale of prewritten software is considered the sale of taxable tangible personal property regardless of whether the software is delivered via a tangible medium (e.g., disk) or transferred electronically. The Department also treats the license to use prewritten software as the taxable sale of tangible personal property. Conversely, the Department treats the sale (or license) of custom software as a service, subject to the GET rate imposed on services. In both instances, if the sale of tangible personal property or services is made by a wholesaler to a licensed seller, the initial transaction may be eligible for the wholesaler tax rate of 0.5% rather than the 4% retailer rate. If the software is sold through a marketplace facilitator, the marketplace facilitator is deemed to be the retail seller subject to GET at the 4% retailer rate, while the marketplace seller is treated as making its sales as a wholesaler.