Tax collector compiling vacation rental list

Tax collector compiling vacation rental list
Published: Apr. 2, 2014 at 1:46 PM HST
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HONOLULU (HawaiiNewsNow) - Cappy Capelouto manages the Marco Polo. None of the units there can be rented out as vacation rentals. Some owners have tried.

"If I become aware of it I crack down on them. We bring it to light and we move on them quickly," he said.

The state's tax collectors are putting together a list of condo and residential owners who rent their units for fewer than 180 days at a time. They want to make sure those owners pay the transient accommodations tax, also known as the TAT.

"This will help everybody at the end of the day to make sure people who are renting short-term rentals are paying their fair share of the taxes," State Department of Taxation spokesperson Mallory Fujitani said.

Condo and home owner associations sent notices and forms to owners.  If they're renting their properties as short term rentals it needs to be documented. Associations will forward the information to the tax department.

Attorney Christian Porter and his law firm represents 300 associations.

"The way we look at it is that the state is asking for associations to help in the reporting requirements, and associations only have to report what's reported to them," he said.

Owners who haven't paid their TATs could be fined up to $25,000 and face a year in jail. The tax department has a voluntary compliance program.

"Basically, we can just work with the taxpayer to work out the amounts that are owed," Fujitani said.

State law requires that owners who live out of the state and rent their units as short term rentals must have a local contact. With the spread of renting off the Internet, that's not always the case.

"A lot of these people don't have an agent," Capelouto said. "They're actually living on the mainland and renting units out here in Hawaii."

Owners who operated short term vacation rentals between Jan. 1, 2013, and Dec. 31, 2013, must report to their associations by March 31, 2014. Associations have until April 30, 2014 to submit the information to the tax department, but the tax department said it will extend that deadline for Associations to July 1, 2014.

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