Hawaii sues for info on Airbnb owners who aren't paying taxes

Hawaii sues for info on Airbnb owners who aren't paying taxes
Updated: Sep. 6, 2018 at 5:20 PM HST
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HONOLULU (HawaiiNewsNow) - The state is taking action to crack down on vacation rental owners who aren't paying taxes.

The attorney general is going to court to force popular vacation rental site Airbnb to turn over documents dating back to 2008 about who is renting out property and what money they've made.

The motion is set to go before a judge Oct. 5.

The state says it believes that many vacation rental owners are failing to report and pay general excise tax and transient accommodation taxes, and they're asking the court to order Airbnb to turn over the names, addresses, Social Security numbers and bank information for potentially thousands of owners.

The state says it needs to use a subpoena against Airbnb because it hasn't been able to get the information in other ways.

"I am very proud of the state Department of Taxation for stepping forward and saying we want to get this information we want to assess whether there's up to $2 million in taxes due to this state," said state Rep. Cynthia Thielen, who district includes Kailua and Kaneohe. "That's serious money. But more serious than that, we need to crack down on these illegal whole house rentals that are taking the rental stock away from local people."

If the judge rules in the state's favor, its goal is to find out who's been paying — and who hasn't.

"If they haven't been paying taxes it's unlikely they would facing criminal penalties depending on how they have avoided paying taxes," said state Director of Taxation Linda Takayama. "But certainly our first attempt is to get the taxes paid. There will be penalties and interest applied if they have not been paying."

In a statement, Airbnb said it "has received the request from the state's Department of Taxation and is currently reviewing it."

The company has fought efforts to turn over user documents in other states.

Last month, Airbnb filed a lawsuit against New York City over a new law that requires all home sharing companies to hand over the names and addresses of hosts to the city. The suit claims the law is unconstitutional and violates its users' privacy.

There are other larger vacation rental companies operating in Hawaii, but the state confirms Airbnb is currently the only one its taking to court.

"We are attempting this with AirBnb because they have a local representative here," said Takayama. "The other two do not, so it would require us to go to the mainland to their place of business to request or to file a subpoena. So for the time being, this is our first step."

The issue of vacation rentals in the islands, where the dearth of affordable housing remains a key issue, has prompted growing tension in recent years.

A report earlier this year from the Hawaii Appleseed Center estimated that 1 in 24 homes in the islands is a vacation rental. And of the state's 23,000 vacation rentals, more than half are owned by non-residents.

This story will be updated.

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