Monday, March 27, 2017   Search

Current Articles | Archives | Search

Sunday, February 05, 2017
Vacation Rentals: Tax Hike Bills on the Move in the Legislature
By Selected News Articles @ 6:47 PM :: 1381 Views :: Taxes, Tourism
 

The Hawaii Legislature opened in January and will run until May.

The HSTA is putting forth an amendment to the State Constitution in order to allow the State to impose a new tax upon vacation rentals.

There are 20 bills currently on the table dealing with vacation rentals and they boil down to four themes.

  1. Advertising Platforms (such as VRBO) can collect and remit taxes on behalf of operators (you).
  2. Travelers to Hawaii and people and companies who provide accommodation to the travelers should pay more in tax.
  3. People who rent out property on a secondary or accessory basis should be limited to renting out no more than 60 nights per year and owning no more than one or two properties.  (More on this below)
  4. Counties should be allowed to change zoning to eliminate transient vacation rentals.  This proposal comes up each year, but this year it only applies to the County of Kauai.

TAXES

There are a number of proposals to increase the TAT from 9.5% to 13.5%.  There are also proposals to add additional taxes on top of the 13.5% to cover education, environment and housing (ie HSTA, UPW, and HGEA jobs).  There is also the proposal to amend the Constitutuin to create a State property tax.   

HB1470

This bill is one of many dealing with the question of hosting platforms as tax collection agents.  It requires operators, to keep records (putting the onus of audit on the operator).  The bill provides for hosting platforms to de-list any advertiser (you) who does not comply with tax or zoning laws and requires the platforms to obtain attestation from you that you are in compliance with zoning laws. It provides for an increase of 4% in the TAT, giving Hawaii the distinction of the most expensive hotel tax in the country.  The bill also provides for the ability of counties to restrict zoning and phase out transient vacation rentals.

This bill also introduces the distinction between short term lodging and transient vacation rentals, discussed above.   The bill also limits the number of rentals any person, couple or company can own to one unit.  The bill also restricts the number of nights an operator can rent registered short-term rental lodging units to 60 per calendar year.

HB1471 / SB1087

These bills are similar to HB1470, but allows anyone, not just hosting platforms, to act as tax collection agents.  However, crucially, it does not have the language around increased taxes, limits on ownership and limits on the number of nights rentable in a year.  HB1471 hearing set for Feb 7 at 9AM.  SB1087 hearing set for Feb 10 at 2:30PM.

SB1281 / HB1242 / SB1202

This is similar in concept to the two bills described above.  SB1281 hearing set for Feb 10 at 2:30PM.   SB1202 hearing also set for Feb 10 at 2:30PM.  

HB546

This bill will allow counties to impose a surtax on the TAT, effective January 1, 2019.  This is in addition to the 4% increase in the TAT proposed in a number of bills this session.  The funds are to be used to fund housing.  HB546 hearing set for Feb 10 at 9:00AM. 

HB180 / SB686

This bill increases visitor taxes to help fund the education system in Hawaii.  The bill would apply a tax on residential investment property as well as on visitor accommodations.  HB180 is deferred until Feb 6.  SB686 was approved with amendments by EDU February 3, 2017.  Its next referral is WAM/JDU. 

Property Value                     Surcharge per $1000 of property value

Under $500,000                      $3.50

$500,000- $750,000                $4.50

$750,000-$1,000,000              $5.50

$1,000,000 - $2,000,000         $6.50

$2,000,000 and over               $7.50

So, if your property was worth $400,000, you would pay $1400 in residential property tax surcharge each year.  If your property was worth $2,000,000, you would pay $15,000.

In addition, there is proposed a nightly tax of $3.00 for rents up to $150 per night and $5.00 per night for rents over $150.  This is regardless of occupancy.  So the $400,000 property probably commands a rent of $150 a night on average, so 365*$5 = $1825, for a total tax of $3225.

The rate of tax, as a percentage of the rental rate decreases as the rental rates increase.  Lower valued properties are hit harder than the high end properties.

Currently, this type of tax is most likely not possible to implement in Hawaii, so they are proposing a constitutional amendment (SB683 & HB182) to allow the state to impose this tax.  This is the same tax which has been the subject of a legal battle in the City and County of Honolulu.

HB1453 / SB1143

This is another tax on tourists, this one being $20 per guest to fund environmental protection and conservation.  The wording indicates that a party of 4 would pay $80.

SB862 / HB1331

This bill allows for the phase out of single family transient vacation rental units in the counties with populations under 100,000, which is essentially Kauai.  The County of Kauai has put forward this bill every year for at least the past 5 years.  Every year it gets defeated.  By narrowing the scope to just that county, perhaps they think it will have a better chance.  SB862 passed PSM January 31.  Its next referral is CPH.

HB1586

The preamble to the bill proposes moving the tax burden from residents to non-residents.  The bill, as currently drafted, doesn’t actually change the tax structure to affect non-residents. 

SB702  

This bill has already garnered some media attention as it states that failure to register for TAT and GET is a class C felony.  For those who weren’t fans of Law and Order, a Class C felony is punishable by a maximum of seven years in prison. Class C felonies include crimes such as theft, possession of a controlled substance, second-degree statutory rape and first-degree involuntary manslaughter.

This bill also sets up a public database whereby anyone can look you up to see if you are properly registered.  This raises certain security and privacy concerns.

SB695

This bill applies TAT to rent and mandatory fees charged to guests.

SB704

This bill proposes to set up a committee to study transient accommodations in the State and provides for membership from vacation rental owners.

Comments
LINKS:

TEXT "follow HawaiiFreePress" to 40404

ARCHIVES: Daily News Read

ARCHIVES: HawaiiFreePress

JOIN OUR EMAIL LIST

RSS FEED Latest 25 articles

TWITTER HawaiiFreePress

FaceBook: HawaiiFreePress

Register to Vote

2aHawaii

808 Silent Majority

808 State Update AM940

ABCDEFG Blog

ACA Signups Hawaii

ALEC

Alliance Defending Freedom

Aloha Conservative Alliance

Aloha Life Advocates

Aloha Pregnancy Care Center

American Council of Trustees and Alumni

American Mothers of Hawaii

AMVETS-Hawaii

AntiPlanner

Antonio Gramsci Reading List

A'ole Eradication

A Place for Women in Waipio

Atomic Monkey

Ballotpedia Hawaii

Better Hawaii

Broken Trust

CAFR Hawaii

Castaway Conservative

Children's Alliance Hawaii

Children's Rights Institute

Choice is an Illusion

Christian Home Educators of Maui

Christian Homeschoolers of Hawaii

Citizens for Recall

Cliff Slater's Second Opinion

Coffee Break

Conservative Forum for Hawaii

CSIS Pacific Forum

DAR Hawaii

December 7 Battlefields at risk

DeedySupport.com

DefendOurKeiki.com

DVids Hawaii

Education Institute of Hawaii

E Hana Kakou Kelii Akina

E Māua Ola i Moku o Keawe

Exposing Chris Butler Cult

Farmers and Friends

Farmers For Choice Hawaii

FIRE

Fix Oahu!

Follow the Money Hawaii

Frank in Hawaii

Friends of Lanai

Front Page Magazine

Frontline: The Fixers

Genetic Literacy Project

Get Off Your Butts!

God, Freedom, America

GoGoGMO!

Grassroot Institute

Habele.org

Hawaii Aganst Assisted Suicide

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii Concealed Carry

Hawaii Coalition Against Legalized Gambling

Hawaii Credit Union Watch

Hawaii Crop Improvement Association

Hawaii Debt Clock

Hawaii Defending Marriage

Hawaii Defense Foundation

Hawaii Families for Educational Choice

Hawaii Family Advocates

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federalist Society

Hawaii Federation of Republican Women

Hawaii Firearm Community

Hawaii Fishermen's Alliance

Hawaii Future Project

Hawaii Gathering of Eagles

Hawaii History Blog

Hawaii Homeschool Association

Hawaii-Israel Alignment

Hawaii Jihadi Trial

Hawaii Knights of Columbus

Hawaii March for Life

Hawaii Meth Project

Hawaii Open Budget

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

HawaiiReporter.com

Hawaii Rifle Association

Hawaii Right to Life -- Big Island

Hawaii Right to Life -- Oahu

Hawaii Senate Informer

Hawaii Shield Law Coalition

Hawaii Shippers Council

Hawaii Smokers Alliance

Hawaii State Data Lab

Hawaii Votes

Hepsy's Kuleana

Heritage Foundation

HHUA

HI Coalition Against Legalized Gambling

HIEC.Coop

Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu TEA Party

Honolulu Traffic

Horns of Jericho Blog

House Minority Blog

House Republican Caucus

House Republican Caucus YouTube

HPACC

Hump Day Report

Hunting, Farming and Fishing Assoc.

I Vote Hawaii

If Hawaii News

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

Investigative Project on Terrorism

Iowa Meets Maui

Jackson v Abercrombie

Jihad Watch

Judgepedia Hawaii

July 4 in Hawaii

Kahle v New Hope

Kahua Group

Kakaako Cares

Kau TEA Party

Kauai Co GOP

Keep Hawaii's Heroes

KeyWiki

Kona TEA Party

Land and Power in Hawaii

Legislative Committee Analysis Tool

Lessons in Firearm Education

Lingle Years

Malulani Foundation

Managed Care Matters -- Hawaii

Mauna Kea Recreational Users Group

Marsy's Law for Hawaii

MentalIllnessPolicy.org

Middle East Forum--The Legal Project

Mililani Conservatives for Change

Military Home Educators' Network Oahu

Missile Defense Advocacy

MIS Veterans Hawaii

Muslim Brotherhood in America

NAMI Hawaii

NARTH

Natatorium.org

National Christian Foundation Hawaii

National Parents Org Hawaii

National Wind Watch

New Zeal

NFIB Hawaii News

No GMO Means No Aloha

No Hawaii Beverage Tax

Northwest Economic Policy Seminar

Not Dead Yet, Hawaii

Now What I Really Think

NRA-ILA Hawaii

ObamaCare Abortion Hawaii

OHA Lies

Ohana Policy Group

OpenHawaii.org

Pacific Aviation Museum

Patients Rights Council Hawaii

Patriot Voices Hawaii

PEACE Hawaii

People vs Machine

Perry and Price Show

Pritchett Cartoons 

Pro-GMO Hawaii

P.U.E.O.

RailRipoff.com

Rental by Owner Awareness Assn

Republican Party -- Hawaii State

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

Robotics Organizing Committee

Salvage The Rail

Save Our Doctors Hawaii

Save the Plastic Bag

School Choice in Hawaii

Senate Minority FB

SenatorFong.com

SIFE Remington

SIFE W. Oahu

Smart About Marijuana--Hawaii

St Marianne Cope

State Budget Solutions Hawaii

State Policy Network

Stop SB2424

Tax Foundation of Hawaii

TEA Party Maui

TFB Micronesia

The Harriet Tubman Agenda

The Long War Journal

The Real Hanabusa

The Verifiable Truth

The Voice of Kapolei

Tim Lussier HuffPo Hawaii

Time Out Honolulu

Truth About Trade & Technology - Hawaii

UCC Truths

Union Members Know Your Rights

United Veterans Hawaii

US Tax Foundation Hawaii Info

Valor in the Pacific

VAREP Honolulu

Vote No 113

Waagey.org

WAPNFFS

Watchdog Hawaii

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii

YAL UH Hilo 

Yes2TMT


Maui TEA Party
Maui TEA Party