On August 10, 2021, the Hawaii Department of Taxation issued Tax Information Notice No. 2021-06 clarifying the treatment and taxation of software sales under the Hawaii General Excise Tax (GET). According to the disclosure of information, the sale of pre-built software is considered to be the sale of taxable tangible personal property, regardless of whether the software is supplied on a tangible medium (e.g. diskette) or transmitted electronically. The Department also treats the license to use pre-built software as a taxable sale of tangible personal property. Conversely, the Department treats the sale (or licensing) of custom software as a service, subject to the GET rate imposed on services. In either case, if the sale of tangible personal items or services is from a wholesaler to a licensed seller, the wholesale tax rate of 0.5% instead of the retailer’s rate of 4% may apply to the first transaction. If the software is sold through a marketplace intermediary, the marketplace intermediary will be treated as a retailer subject to the GET at the retailer’s rate of 4%, while the marketplace seller will be treated as a wholesaler.