Hawaii legislative committees have passed new versions of bills addressing vacation rentals.
Lawmakers have been keen to devise ways to make sure vacation rental operators are paying transient accommodation taxes just like hotels. This has been a struggle in part because many rentals, particularly on Oahu, are being operated illegally without permits.
State Senate committees on tourism and public safety late Wednesday passed legislation giving hosting platforms like Airbnb the option to pay hotel taxes on behalf of short-term rental operators.
The bill says platforms that do so would have to ensure operators comply with state and county land use laws. It says platforms would have to ensure operators provide written verification of their compliance. The bill, which amended House legislation, next goes to the Senate Ways and Means Committee.
“We want to make sure that this bill doesn’t hurt the good actors, but also gives us an opportunity to go after the bad actors out there,” said Sen. Glenn Wakai, the Senate tourism committee chairman.
Wakai, who represents Kalihi and other Oahu neighborhoods, said the reporting requirements would help lawmakers understand how many short-term rental units are being offered, what their economic impact is and what the state’s tax opportunities are.
The legislation, he said, offers Honolulu and other counties “a carrot” to get their land use regulations in order by offering them a percentage of new taxes the state is able to get from short-term rentals.
Matt Middlebrook, Airbnb public policy manager, said in a statement that his company is committed to working with lawmakers to more effectively capture an estimated $100 million in taxes generated by the short-term rental industry each year. But he said the Senate bill conflicts with federal law.
David Louie, an attorney for the Internet Association, a national group representing online companies like Facebook and Expedia, said under federal law websites can’t be held liable for the content of other people’s postings. They also can’t be forced to screen or verify online postings by third parties, he said.
The House tourism committee on Tuesday passed legislation that also would also allow platforms to pay taxes on behalf of short-term rental operators. But the House bill doesn’t require platforms to verify operator compliance with land use laws. This bill next goes to the House finance committee.
This legislation amended a Senate bill that called for a working group to develop a way to collect data on how vacation rentals affect Hawaii’s tax revenue, housing supply and brand as a visitor destination.
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