“NEW DOTAX DATA SUGGEST THAT AIRBNB BUSINESSES ARE PAYING THEIR TAXES - BUT THEIR NUMBERS MAY BE GROWING OUT OF CONTROL”

26,000 filers are paying TAT taxes, though many likely not permitted by City & County

News Release from Rep. Gene Ward (R-Hawaii Kai – Kalama Valley)

Rep. Gene Ward (R-Hawaii Kai – Kalama Valley) in the House Finance Committee Hearing (1/9/2018) questioned the Department of Taxation about the status of the deadlock between collecting taxes by the State and permitting of Airbnb by the City and County.  What he discovered were two shocking statistics.

1) "I was told there were 26,000 TAT filers in the state of Hawaii.  If we deduct the number of hotels, lodges and condos in this group (approximately 200) we are left with over 25,500 filers providing accommodations for visitors.  This means there are way more than suspected filers actually paying their transient accommodation taxes than originally estimated," Ward explained. 

"Of course the lion's share of the TAT tax is being paid by the hotels, lodges, and condos, but the estimated amount of money the State was thought to be losing each year, up to $6 million per year appears greatly exaggerated.  No figures were available on how much the 26,000 filers, minus the hotels' share of the TAT, contributed to the State's coffers.

2) The second shocking implication of the 26,000 TAT filers, is that filers were thought to represent just over half of actual visitor accommodation paying their taxes. "If 26,000 filers represent just half or a small percentage of existing Airbnbs out there, then this thing has gotten out of hand and demands our immediate attention.

"In the final analysis, it appears the State has done its part in collecting the taxes on Airbnb, and it is now appears up to the Counties to settle the permitting issue.  This is no small breakthrough in statistics, and hopefully the 2018 Legislative Session will take this into consideration as the Legislature has tended to kick the can down the road on this issue for too long now and always assumed that Hawaii's Airbnb businesses were not paying their taxes and were no way 25,000 strong as indicated by the DOTAX," Ward concluded.

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