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Hotels urge Ige to veto vacation rental taxation bill

Allison Schaefers
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Hawaii Gov. David Ige speaks to reporters at a news conference at the Hawaii State Capitol, May 2.

The American Hotel & Lodging Association along with heads of more than 10 Hawaii hotel companies are urging Gov. David Ige to veto Senate Bill 1292, which would authorize vacation rental platforms such as Airbnb to collect taxes on behalf of the state.

State tax officials have calculated that the bill would raise an extra $52 million next fiscal year if it passes, and lawmakers hope to use that money to finance various initiatives. However, opponents like the traditional lodging industry and Unite Here Local 5 have argued that the bill would condone vacation rental operations that violate county land use ordinances.

Ige vetoed a similar vacation rental tax bill in 2016, saying that approach would shield property owners who illegally operate vacation rentals in residential neighborhoods where the city and counties do not allow them.

Traditional hotel industry players and their trade organization sent Ige a letter Tuesday urging him to use his veto power again.

“To ensure a level playing field for all players in the lodging sector, tax legislation such as this must be coupled with strong regulatory oversight. SB 1292 clearly fails this standard and should be rejected,” the letter read.

The group told Ige that it looked forward to working with his administration and the Legislature on a ” better solution.”

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