The House Finance Committee approved a controversial measure Tuesday that would collect hotel room and general excise taxes owed by vacation rental owners.
Airbnb, a popular service that connects travelers with vacation rental owners, said the proposal -- similar to a bill vetoed last year by Gov. David Ige -- will generate up to $26 million a year in state taxes that aren't being collected now.
"Our intention from the start was to collect and remit taxes from our community. We've done that in 220 jurisdictions now and we want to add Hawaii to that list," Cynthia Wang, regional public policy director for Airbnb said.
However critics believe the bill could help conceal illegal vacation rentals, which they say are driving up property taxes and reducing the state's inventory of affordable homes.
"You would open up the door to a proliferation of more people getting into short-term vacation rentals," state Sen. Laura Thielen said.
Ben Sadowski, research analyst with the hotel union Unite Here Local 5, added, "We're really concerned that it's taking away from the affordable housing in our communities. We have a lot of people who are struggling to make it," he said.
But Airbnb said it willing to work with the counties on the problem of illegal rentals, but a tax measure is the wrong vehicle to require owners to properly permit their properties.
"When it comes to land use issues we do think there's a need for modernization and update on the county level to reflect today's economy," Wang said.
The bill next goes to the House floor before crossing over to the state Senate.