STAND. COM. REP. NO. 479
RE: S.B. No. 519
Honorable Donna Mercado Kim
President of the Senate
Twenty-Eighth State Legislature
Regular Session of 2015
State of Hawaii
Your Committees on Tourism and International Affairs, Commerce and Consumer Protection, and Judiciary and Labor, to which was referred S.B. No. 519 entitled:
"A BILL FOR AN ACT RELATING TO TAXATION,"
beg leave to report as follows:
The purpose and intent of this measure is to require operators of transient accommodations and plan managers of resort time share vacation plans to indicate compliance with registration requirements in advertisements and to increase penalties for operators and plan managers who fail to comply with the law, with escalating penalties for repeat violators.
Your Committees received testimony in support of this measure from the Kailua Neighborhood Board, Maui Hotel & Lodging Association, Hawaii Appleseed Center for Law and Economic Justice, and three individuals. Your Committees received testimony in opposition to this measure from the Hawaii Tourism Authority and thirteen individuals. Your Committees received comments on this measure from the Department of Taxation, Tax Foundation of Hawaii, and three individuals.
Your Committees find that many residents of Hawaii believe that home-based vacation rentals should be subject to the same transient accommodations tax levied on hotel rooms and time shares. Although many home-based vacation rentals are subject to the same transient accommodations tax levied on hotel rooms and time shares, many operators of transient accommodations and plan managers of resort time share vacation plans have been circumventing the law, creating an unfair advantage over their law-abiding counterparts. In line with public sentiment on this issue, your Committees find that action is necessary to correct this situation.
Your Committees further find that Act 326, Session Laws of Hawaii 2012, accomplishes many of the goals of this measure, specifically requiring registration numbers on all internet advertisements; however, Act 326 is set to be repealed on December 31, 2015. Your Committees also find that the Department of Taxation enforces civil penalties under the Cash Economy Enforcement Act, and similar civil penalties are suited for operators and plan managers who fail to conspicuously post their transient accommodations certificate of registration.
Accordingly, your Committees have amended this measure by:
(1) Deleting section 2, which adds single family dwelling to the definition of "transient accommodations";
(2) Deleting language that requires operators and plan managers to conspicuously display the registration number and address on all internet advertisements for that transient accommodation;
(3) Deleting language that establishes criminal penalties and escalating fines for violation of the registration posting requirement for internet advertisements;
(4) Inserting language that authorizes the Department of Taxation to issue cease and desist citations to an operator or plan manager who fails to conspicuously post the transient accommodations certificate of registration;
(5) Amending Act 326, Session Laws of Hawaii 2012, to remove the repeal date and thereby make it permanent;
(6) Amending the purpose statement; and
(7) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.
As affirmed by the records of votes of the members of your Committees on Tourism and International Affairs, Commerce and Consumer Protection, and Judiciary and Labor that are attached to this report, your Committees are in accord with the intent and purpose of S.B. No. 519, as amended herein, and recommend that it pass Second Reading in the form attached hereto as S.B. No. 519, S.D. 1, and be referred to the Committee on Ways and Means.
Respectfully submitted on behalf of the members of the Committees on Tourism and International Affairs, Commerce and Consumer Protection, and Judiciary and Labor,
ROSALYN H. BAKER, Chair
GILBERT KAHELE, Chair
GILBERT S.C. KEITH-AGARAN, Chair