HOUSE OF REPRESENTATIVES

H.B. NO.

2078

TWENTY-SIXTH LEGISLATURE, 2012

H.D. 2

STATE OF HAWAII

S.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO TAXATION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


SECTION 1. The legislature finds that although many owners of transient accommodations operate in compliance with applicable state and county laws, there are a sizeable number of owners who do not. Failure to comply denies the State and counties of the transient accommodations taxes and general excise taxes they are due. Enforcement efforts may also be hampered when the owner of a transient accommodation lives on a different island from the property or out of state.

The legislature also finds that requiring nonresident owners to employ a licensed professional such as a real estate broker or salesperson or a condominium hotel operator is an important consumer protection measure. Consumers who use real estate companies, real estate brokers, real estate salespersons, or condominium hotel operators for their transient accommodation rental needs can do so with the knowledge that all money generated will flow through a client trust account, the appropriate federal tax forms will be generated, and accurate transient accommodations taxes and general excise taxes will be paid. Real estate companies, real estate brokers, real estate salespersons, and condominium hotel operators must comply with specific licensing and bonding requirements, thus offering additional protections for consumers.

Requiring owners who live on a different island from their transient accommodation property or out of state to provide a local contact is another important aspect of consumer protection. A local contact close to the rental property is essential in case of an emergency or natural disaster.

Accordingly, the purpose of this Act is to foster consumer protection in the State's transient vacation rental market and ensure greater compliance with applicable state and county laws by owners who operate transient accommodations in the State.

SECTION 2. Chapter 237D, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"237D-   Nonresident owner; transient accommodations. (a) Any nonresident owner who operates a transient accommodation located in the nonresident owner's private residence, including a condominium, apartment, or townhouse as defined in chapters 514A, 514B, or 421J, shall employ a real estate broker or salesperson licensed under chapter 467; provided that any nonresident owner who operates a transient accommodation located in the nonresident owner's private residence in a condominium hotel shall employ a condominium hotel operator pursuant to section 467-30. The nonresident owner shall furnish the name, address, and contact information of the real estate broker or salesperson or condominium hotel operator to any association of homeowners, community association, condominium association, cooperative, or any other nongovernmental entity with covenants, bylaws, and administrative provisions with which the owner's compliance is required.

Any real estate broker or salesperson or condominium hotel operator authorized under an agreement by the nonresident owner of transient accommodations located within this State to collect rent on behalf of the nonresident owner shall be subject to the requirements of sections 237-30.5, 237D-6, and 237D-8.5.

It shall be unlawful for any nonresident owner to operate a transient accommodation located in the nonresident owner's private residence, including a condominium, apartment, or townhouse as defined in chapters 514A, 514B, or 421J, without employing a real estate broker or salesperson as required under this section. It shall also be unlawful for any nonresident owner to operate a transient accommodation located in the nonresident owner's private residence in a condominium hotel without employing a condominium hotel operator as required under this section.

Any person or entity not subject to the exemption under subsection (d) who violates this section shall be subject to a fine not to exceed $          .

(b) Any nongovernmental entity with covenants, bylaws, and administrative provisions which is formed pursuant to chapter 514A, 514B, or 421J, or is registered as a condominium hotel operator pursuant to section 467-30, shall provide the department with all relevant information related to all owners who may be leasing their property as transient accommodations by December 31 of each year. Any person or entity who violates this section shall be subject to a fine not to exceed $          .

(c) Each county shall provide the department with all relevant information about owners of real property that is permitted as a transient accommodation by the respective county by December 31 of each year. Notwithstanding any provision of title 14 to the contrary, the department shall provide the counties with information necessary for the enforcement of county real property tax laws.

(d) The department shall issue a registration identification number for each nonresident owner, which shall be included as part of the relevant information related to an owner who may be leasing property as transient accommodations.

(e) A nonresident owner who obtains an annual tax clearance from the department and submits the tax clearance along with its federal tax form 1099 or any other applicable tax form to the real estate commission shall be exempt from subsection (a).

(f) The name and phone number of a local point of contact for each transient accommodation shall be included in any transient accommodation contract or written rental agreement and shall be prominently posted in the transient accommodation. The local point of contact shall reside on the same island as the transient accommodation. Any person or entity who violates this section shall be subject to a fine not to exceed $          .

(g) Any fines for violations of this section shall be in addition to the payment of any back taxes.

(h) For the purposes of this section:

"Nonresident owner" means an owner of a rental property in the State who resides on a different island from the property or out of state and who rents or leases the property to a tenant."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect July 1, 2013.



 

Report Title:

Transient Accommodations; Nonresident Owners

 

Description:

Requires any nonresident owner who operates a transient accommodation located in the nonresident owner's private residence to employ a real estate broker or salesperson. Requires any nonresident owner who operates a transient accommodation located in the nonresident owner's private residence in a condominium hotel to employ a condominium hotel operator. Requires relevant information about owners of the transient accommodation to be provided to the department of taxation for enforcement purposes. Requires the counties to provide the department of taxation with relevant owner information about every transient accommodation permitted by the respective counties annually. Requires the department of taxation to issue a registration identification number for each nonresident owner, which shall be included as part of the relevant information related to an owner who may be leasing property as transient accommodations. Establishes fines for noncompliance. Provides an exemption from the mandatory employment of a licensed real estate broker or salesperson or condominium hotel operator in certain circumstances. Requires the name and phone number of a local point of contact for each transient accommodation to be included in any transient accommodation contract or written rental agreement and to be prominently posted in the transient accommodation. Effective 7/1/2013. (SD1)

 

 

 

The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.