Hawaii lawmakers hope a recent ruling will play in their favor in regulating vacation rentals

Updated: Apr. 9, 2019 at 11:13 PM HST
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HONOLULU (HawaiiNewsNow) - There is a new push to start taxing thousands of illegal vacation rentals in Hawaii.

A recent court ruling means this could be a breakthrough year.

But companies such as Airbnb Inc. are warning that a crackdown could end up costing the state in lost tourism revenue.

Two separate bills are advancing at the State Capitol – ones that have failed before – but this time lawmakers who support the bills are hoping things will be different.

"We've been at it for four years. I was hopeful last year. I was hopeful the year before, and we got absolutely nothing," said Sen. Glenn Wakai, chair of the Senate Committee on Energy, Economic Development, and Tourism.

Senator Wakai says this year may be different because of a recent court ruling in California that said online platforms for rentals can be forced to give information about their hosts to the government.

He and other lawmakers say getting taxes from the thousands of illegal rentals could add up to millions of dollars.

“We are missing out on perhaps $100 million in tax revenues,” Sen. Wakai said.

“It’s a revenue bill. So hopefully bring in more TAT and general excise tax revenue and it’s also a bill that puts everyone on a level playing field,” said Rep. Richard Onishi, chair of the House Committee on Tourism and International Affairs. “The hotels all pay it, the time shares pay it, it’s just a matter of equity in terms of insuring that the state is receiving the taxes that are supposed to be paid."

In its testimony, Airbnb said HB419 “does not contemplate a fair process for regulating the industry but simply seeks to impose harsh fines.” It also said, “Hundreds of millions, if not billions, of dollars in tourist revenue could be at risk if this bill were adopted as currently proposed.”

Wakai said he sees it the other way around.

“We’re talking about increasing taxes for education, roads, what have you. Why are we even having that conversation? Let’s just go after the people who should be paying their taxes," said Wakai.

The counties would still have the authority to issue permits and regulate the vacation rentals.

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