Only one bill has survived this year’s legislative session out of the dozen or so aimed at stepping up enforcement and tax collections for Oahu’s burgeoning home-based vacation rental market.
Senate Bill 519, approved by a conference committee Friday, extends for one year Act 326, which requires operators of transient accommodations to report to their homeowner associations, which must forward information to the state tax office. Under the 2012 law they must supply contact information for short-term rental owners and their local operators. Transient accommodations tax license numbers and website addresses also must be forwarded.
SB 519 takes Act 326 further by requiring that the registration number and address of each transient accommodation and timeshare unit be displayed on Internet advertisements. Legislators also clarified the penalties with escalating daily civil fines for operators and plan managers who fail to follow advertising and reporting requirements.
State Rep. Karl Rhoads, who supports the bill, said in an interview: "It’s not really a new initiative; we’re trying to improve an old one.
IT’S A WRAP
State legislative committees wrapped up their work for this session Friday. Here’s a look at how some key bills fared. Bills approved by the committees will go to the full House and Senate for final votes next week.
>> A 5-year extension of the rail excise tax surcharge
>> Extension of requirement for reporting vacation rentals
>> State purchase of 55 acres at Turtle Bay
>> Pursue state purchase of Alii Place
>> Funding for Open Doors preschools
>> Excise tax credit for low-income families
>> Mandate insurance coverage for autism
>> Payday lending controls
>> Voting by mail-in ballot
>> Regulate ride-hailing companies
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"We’ve had many complaints about illegal rentals in certain neighborhoods for decades. I think this will give us a chance to study the issue more and figure out the macro trends," said Rhoads (D, Chinatown-Iwilei-Kalihi).
State Rep. Tom Brower, chairman of the state House Tourism Committee, said he too supports the bill, but said it fell short of addressing tax cheats.
"As chair of Tourism, my goal is to ensure all stakeholders are on a level playing field," Brower (D, Waikiki-Ala Moana-Kakaako) said in an interview. "The rise in (bed-and-breakfast and vacation rental) usage concerns me because many of them are not paying the taxes associated with providing these services, which gives them a competitive advantage at the expense of our local economy."
Over the next year, Brower said, he will push to fairly regulate and tax vacation rentals.
"The state needs to coordinate with the counties to work out a fair and enforceable solution," Brower said.
But Honolulu City Councilman Ikaika Anderson said in an interview that the issue should be addressed solely by the county.
"It’s a land-use issue," said Anderson, who has introduced a bill that cracks down on illegal vacation rentals, while allowing for the limited expansion of owner-occupied bed-and-breakfast homes.
An enforcement bill also was introduced by Mayor Kirk Caldwell, and City Council Chairman Ernie Martin has introduced a measure to expand vacation rentals.
