THE SENATE

S.B. NO.

519

TWENTY-EIGHTH LEGISLATURE, 2015

 

STATE OF HAWAII

 

 

 

 

 

 

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 a recent business pulse survey in the January 9, 2015, edition of the Pacific Business News found that 71.5 per cent of respondents said "yes" when asked, "Should home-based vacation rentals be subject to the same transient accommodations tax (TAT) levied on hotel rooms and time-shares?"  25.7 per cent of respondents said "no" and 2.8 per cent were undecided.  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, the legislature finds that action is necessary to correct this situation.

     The purpose of this Act is to require operators of transient accommodations and plan managers of resort time share vacation plans to indicate in advertisements that they are complying with registration requirements under law and to increase penalties for operators and plan managers who fail to comply with the law, with escalating penalties for repeat violators.

     SECTION 2.  Section 237D-1, Hawaii Revised Statutes, is amended by amending the definition of "transient accommodations" to read as follows:

     ""Transient accommodations" means the furnishing of a room, apartment, suite, or the like which is customarily occupied by a transient for less than one hundred eighty consecutive days for each letting by a hotel, apartment hotel, motel, condominium property regime or apartment as defined in chapter 514A or unit as defined in chapter 514B, cooperative apartment, single-family dwelling, or rooming house that provides living quarters, sleeping, or housekeeping accommodations, or other place in which lodgings are regularly furnished to transients for consideration."

     SECTION 3.  Section 237D-4, Hawaii Revised Statutes, is amended as follows:

     1.  By amending subsection (a) to read:

     "(a)  Each operator or plan manager as a condition precedent to engaging or continuing in the business of furnishing transient accommodations or in business as a resort time share vacation plan shall register with the director the name and address of each place of business within the State subject to this chapter.  The operator or plan manager shall make a one-time payment as follows:

     (1)  $5 for each registration for transient accommodations consisting of one to five units;

     (2)  $15 for each registration for transient accommodations consisting of six or more units; and

     (3)  $15 for each resort time share vacation plan within the State;

upon receipt of which the director shall issue a certificate of registration in such form as the director determines, attesting that the registration has been made.  The registration shall not be transferable and shall be valid only for the operator or plan manager in whose name it is issued and for the transaction of business at the place designated therein.

     The registration, or in lieu thereof a notice stating where the registration may be inspected and examined, shall at all times be conspicuously displayed at the place for which it is issued.  The operator of a transient accommodation shall ensure that any internet advertisement for the furnishing of the transient accommodation contains the address of the transient accommodation and conspicuously displays the number of the certificate of registration issued to the operator pursuant to this subsection.  The plan manager of a resort time share vacation plan shall ensure that any internet advertisement for the furnishing of a time share vacation unit subject to the resort time share vacation plan contains the address of the time share vacation unit and conspicuously displays the number of the certificate of registration issued to the plan manager pursuant to this subsection.  Acquisition of additional transient accommodation units after payment of the one-time fee shall not result in additional fees.

     The registration provided for by this section shall be effective until canceled in writing.  Any application for the reissuance of a previously canceled registration identification number shall be regarded as a new registration application and shall be subject to the payment of the one-time registration fee.  The director may revoke or cancel any license issued under this chapter for cause as provided by rule under chapter 91."

     2.  By amending subsection (c) to read:

     "(c)  Any person who may lawfully be required by the State, and who is required by this chapter, to register as a condition precedent to engaging or continuing in the business of furnishing transient accommodations or as a plan manager subject to taxation under this chapter, who engages or continues in the business without registering in conformity with this chapter, shall be guilty of a misdemeanor.  Any director, president, secretary, or treasurer of a corporation who permits, aids, or abets such corporation to engage or continue in business without registering in conformity with this chapter, shall likewise be guilty of a misdemeanor.  The penalty for the misdemeanors shall be that prescribed by section 231-34 for individuals, corporations, or officers of corporations, as the case may be, for violation of that section.

     Any operator of a transient accommodation or plan manager of a resort time share vacation plan required by this chapter to ensure that any internet advertisement for the furnishing of the transient accommodation or a time share vacation unit subject to the resort time share vacation plan, respectively, contains the address of the transient accommodation or time share vacation unit, respectively, and conspicuously displays the number of the certificate of registration issued to the operator or plan manager, respectively, but who fails to do so shall be guilty as follows:

     (1)  For a first violation, guilty of a misdemeanor and subject to an initial fine of $500, or a higher amount determined by the department through rules adopted pursuant to chapter 91, for each day of violation;

     (2)  For a second violation within a six-month period of the first violation, guilty of a misdemeanor and subject to a fine equal to two times the amount of the initial fine imposed pursuant to paragraph (1), for each day of violation;

     (3)  For a third violation within a six-month period of the second violation, guilty of a misdemeanor and subject to a fine equal to three times the amount of the initial fine imposed pursuant to paragraph (1), for each day of violation; and

     (4)  For a fourth or subsequent violation within a six-month period of the third violation, guilty of a class C felony and subject to a fine equal to four times the amount of the initial fine imposed pursuant to paragraph (1), for each day of violation."

     SECTION 4.  New statutory material is underscored.

     SECTION 5.  This Act shall take effect upon its approval.

 

INTRODUCED BY:

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Report Title:

Vacation Rentals; Transient Accommodations Tax; Registration; Advertisements

 

Description:

Requires that a transient accommodations tax certificate of registration number and address of each transient accommodation and time share vacation unit be conspicuously displayed on all internet advertisements for transient accommodations and time share vacation units.  Makes it a criminal offense for any person who fails to conspicuously display the registration number and address on internet advertisements and assesses escalating fines for subsequent violations.  Allows the department of taxation to increase the amount of the initial fine through rule making.  Adds single-family dwellings to the definition of "transient accommodations" in chapter 237D, Hawaii Revised Statutes.

 

 

 

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