Lawmakers are again weighing legislation that would allow Airbnb to collect for the state an estimated $30 million a year in taxes generated by short-term rentals marketed on the popular home-sharing platform.
Senate Bill 2999 is the latest attempt by the Legislature to come up with a system to capture general excise and transient accommodations taxes from Airbnb and other companies that facilitate transient rentals.
Opponents have faulted past proposals for appearing to turn a blind eye to operators of illegal vacation rentals in exchange for the tax revenue. Critics say past efforts — including a bill that Gov. David Ige vetoed in 2016 — would have allowed the continued proliferation of short-term rentals that they contend reduce the supply of housing for local residents and overwhelm residential neighborhoods. Hotels also cry foul because many short-term rentals don’t pay transient accommodations taxes.
By some counts there are 30,000 illegal short-term rentals in Hawaii, mostly on Oahu, where the city ceased issuing permits for transient vacation rentals nearly 30 years ago. Except for grandfathered properties, short-term rentals are permitted only in areas zoned for resort use on the island.
Under SB 2999, the state would allow so-called transient accommodations brokers to register as tax collection agents on behalf of operators.
Brokers would be required to report the addresses, number of nights rented and rental rates for all taxes remitted. That information also would have to be provided upon request to a county’s mayor or planning director to ensure compliance with local land use and zoning laws.
As an incentive for counties that have struggled with enforcement, when a county establishes a process for verifying compliance with its land use ordinances, the county will get an unspecified percentage of the GET and TAT collected in that county for that fiscal year under the bill.
The bill also calls on the state tax department to create a one-time amnesty program for those who voluntarily report and remit outstanding taxes and interest owed.
Airbnb attorney David Louie said the bill violates the federal Communications Decency Act and the Stored Communications Act as well as the Fourth Amendment of the U.S. Constitution, prohibiting unreasonable searches and seizures.
Matt Middlebrook, public policy manager for Airbnb in Hawaii, said the company supports the intent of the bill.
“We want to be a long-term partner with the state of Hawaii,” he testified Wednesday before the Senate Ways and Means and Economic Development, Tourism and Technology committees. “Our desire has been and consistently remains to be willing and able to try and work with you on these issues.”