Kokua Line: Tax department following up on landlords who may be avoiding taxes on rental income
Question: Some Hawaii landlords are rejecting government relief to cover unpaid rent because they do not have general excise tax licenses and are not paying taxes on their rental income. The tenants were the ones who applied for the relief, thereby identifying their landlords (808ne.ws/ rentrelief). Now that the state knows who these landlords are, can and/or will the tax department follow up to demand back taxes from these landlords?
Answer: Yes. “The Department of Taxation has already started the process of identifying and contacting these landlords. It’s a fairness issue; people who circumvent their tax responsibilities make everyone else pay more. Our tax department has a responsibility to protect the revenues of the state, for the sake of all of the people of Hawaii,” DOTAX Director Isaac W. Choy said Tuesday in an email.
The state’s federally funded, pandemic-era Rent Relief and Housing Assistance Program required a tenant to submit the application requesting aid and their landlord to finalize the application by completing a vendor verification form. Once an application was approved, the money was paid directly to the landlord.
To be clear, the state program knows which landlords have not verified an application submitted by a tenant, but they do not know why in every case; there are reasons besides tax avoidance. The program is trying to get as many landlords as it can to verify now, while it can still disperse the money.
As of Monday the program said it had disbursed $52.3 million in rent or mortgage relief, assisting 12,271 Hawaii households. Another $5.5 million was pending verification by landlords who are supposed to receive the money.
The state program and its nonprofit partners are trying to reach landlords who have failed to finalize an eligible application while they still have time to do so.
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“Currently, we are concentrating on disbursing as much of the Rental Relief Program funds as we can before the program expires at the end of the year. We are looking into how best, at the conclusion of the program, to compile and process program data that is collected from the nonprofits that are administering the program,” said Kent Miyasaki, a housing information specialist for the state’s Housing Finance and Development Corp.
Once distilled, that program data could be used to follow up on the reasons for any remaining landlords’ failure to verify, he said.
Auwe
Auwe! Within 35 minutes on Monday night, I encountered two pedestrians and a skateboarder in the street illegally at night. It’s a miracle I didn’t hit any of them. First, a man in dark clothing walking in the middle of the street on Hawaii Kai Drive. Not walking across the street — walking down the middle of the street. At night. In dark clothing. Next, likewise, a skateboarder skating down the middle of Keahole Street. All the way down Keahole Street, from Hawaii Kai Drive to Kalanianaole Highway. Then there was the woman jaywalking on Keahole. Not at an intersection. Not at a light. Just darting across the middle of the street between traffic in the dark. Her friend wisely walked down to the intersection and crossed with the light. Do these people think drivers can see them? They are wrong. They are risking their lives. — Careful driver
Mahalo
Oahu residents seem to be going all out with the Christmas lights this year, and I appreciate it. The decorations add some cheer to what has otherwise been a pretty gloomy year. Their electrical bills might be high, but they are doing a good deed for their neighbors. — A reader
Write to Kokua Line at Honolulu Star-Advertiser, 7 Waterfront Plaza, Suite 210, 500 Ala Moana Blvd., Honolulu 96813; call 529-4773; fax 529-4750; or email kokualine@staradvertiser.com.