Hawaii does not have a sales tax. Rather, it has a "general excise tax" of 4% statewide (4.5% in Oahu county). This tax applies to goods & services of almost all kinds. Technically speaking, a sales tax is collected from consumers, whereas an excise tax is collected from a business generating the revenue. Using this reasoning, ALL transactions are taxed, including sales to nonprofits, sales out of state, and wholesale/resale transactions (though resale transactions are taxed at a lower rate).

The law allows this tax to be passed on to consumers, on almost all receipts you will see 4% added to the bottom line.

Bottom line, yes, you are charged tax on a service charge.

Sneaky, deceptive, and inappropriate in my humble opinion...but at least it's 4% and not 9.75% like city of LA!