Wednesday, November 13, 2024
Hawai'i Free Press

Current Articles | Archives

Saturday, December 19, 2015
TAT Already Applies to TVRs—but DoTax Not Enforcing it
By Selected News Articles @ 1:38 PM :: 5328 Views :: Taxes, Tourism

TAT already applies to TVRs but state lacks ability to ensure compliance

by Adam Leamy

Disservice.

A troubling word in a state where tourism is so important.

An apt word, though, when something is written about Hawaii tourism that’s harmful to it.

That’s what occurred in the editorial, “TAT should apply to non-hotels, too” (Star-Advertiser, Our View, Nov. 2).

The view spoke to Hawaii’s transient accommodations tax (TAT), urging its application to transient vacation rentals (TVRs).

It said providers of the TVR-accommodation option are not required to collect and remit the TAT.

The thing is, they are. In September 2014, Hawaii’s Regulated Industries Complaints Office published “Information for Owners of Rental Property,” which allows owners to know their legal responsibilities.

Same with the Hawaii Real Estate Commission’s August 2014 Bulletin, at page 7, which also offers instruction from the Hawaii Department of Taxation (DoTax) on compliance in respect of Act 326, “Transient Accommodations.”

Hawaii state law has always required TVR operators to collect and remit to the state the TAT and the general excise tax (GET).

And two additional laws (Act 326 in 2012 and Act 204 in 2015) provided additional tax reporting requirements for non-hotel accommodation providers.

Therein lies the disservice done by the editorial: Calling for new laws when existing laws aren’t enforced by the state.

Those harmed are legal operators of TVRs, and the millions of visitors each year who expect from Hawaii this same form of accommodation accessible in any global tourism destination.

Put simply, DoTax success in tax enforcement and collection is critical for all who rely upon and consume state services and supports — residents and visitors alike. But Hawaii collection of GET and TAT requires enforcement of Hawaii tax laws by the Hawaii DoTax. Yet DoTax has not been provided the human and technological resources to enforce the existing laws.

Evidence for this is the Nov. 25, 2014, letter to the governor from the director of taxation prefacing the DoTax annual report for fiscal year 2014.

The letter advises that the department collects 95 percent of all state taxes. Collection of the state’s largest source of revenue — the GET, a whopping 44 percent of the state’s total tax collection — dropped by 2 percent from the year previous.

“We recognized that taxpayers may fall out of compliance if they are not promptly served when they have questions about filing or paying their taxes. Our call answer rate (the percentage of incoming calls that are answered) had fallen from 80 percent in FY 2009 to 61 percent in FY 2010 and to 40 percent in FY 2011. We were able to improve the answer rate to 56 percent in FY 2012 and to 59 percent in FY 2013, but the answer rate fell to 42 percent in FY 2014. The Customer Inquiry Section still has many unfilled positions.

We continue to strive to improve operations that were significantly impaired by the staffing reductions of FY 2009-2011. The 43 abolished positions and 59 frozen positions represented a 26 percent reduction in available staff hours and resulted in a significant backlog of work.”

Staffing reductions. Abolished positions. Inability to answer taxpayers questions when tax compliance hangs in the balance. In the agency that ensures compliance and collects the money?

Perhaps there’s a reason to impair the tax-enforcement-and-collection agency. But doing so removes credibility from all who would isolate supposed vacation-rental tax cheats as the problem.

As DoTax makes clear, it doesn’t have the resources to ensure tax compliance from any source of commerce, from newspaper publishers to hoteliers.

The measures required are not more laws on TVRs. What’s required is resourcing of the Hawaii Department of Taxation so it can counter its admission that it “can’t tax,” and fulfill, through enforcement, its “Do Tax” acronym.

---30---

Adam Leamy operates B.C.-based Northwest Public Affairs, and owns investment properties in Hawaii.

March, 2015: Hawaii the extortionate state--Vacation Rental Bills Violate NAFTA

Links

TEXT "follow HawaiiFreePress" to 40404

Register to Vote

2aHawaii

Aloha Pregnancy Care Center

AntiPlanner

Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii

FIRE

Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Habele.org

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together

HiFiCo

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

MentalIllnessPolicy.org

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

Natatorium.org

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii

Obookiah

OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

RailRipoff.com

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

SenatorFong.com

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

Waagey.org

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii