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:
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
The purpose of this Act is to:
(1) Extend for one additional year, the changes adopted by Act 326, Session Laws of Hawaii 2012, which, among other things, established local contact and informational requirements for transient accommodations;
(2) Require the department of taxation to submit an annual report to the legislature on the implementation of Act 326, Session Laws of Hawaii 2012;
(3) Authorize the department of taxation to enforce civil penalties for operators and plan managers who fail to display certificates of registration and registration identification numbers as required by section 437D-4, Hawaii Revised Statutes;
(4) Authorize the deposit of monetary fines into the tax administration special fund; and
(5) Amend the definition of "local contact" for the purposes of transient accommodations tax.
SECTION 2. Section 237D-1, Hawaii Revised Statutes, is amended as follows:
1. By adding two new definitions to be appropriately inserted and to read:
""Transient" means any occupant of a room, apartment, suite, single family dwelling, or the like in a hotel, apartment hotel, motel, condominium property regime, or apartment, as defined in chapter 514A or unit as defined in chapter 514B, cooperative apartment, dwelling unit, or rooming house that provides living quarters, sleeping, or housekeeping accommodations, or other place in which lodgings are furnished to other than residents and pursuant to an agreement, written or oral, for such lodging and consideration, other than a rental agreement as defined in section 521-8.
"Transient accommodations broker" means any person or entity, including online websites, online travel agencies, online booking agents, that offers, lists, advertises, or accepts reservations or collects whole or partial payment for transient accommodations."
2. By amending the definition of "transient accommodations" to read:
accommodations" means the furnishing of a room, apartment, suite, single
family dwelling or the like [
which is customarily occupied by] to
a transient for less than one hundred eighty consecutive days for each letting [ by]
in a hotel, apartment hotel, motel, condominium property regime or
apartment as defined in chapter 514A or unit as defined in chapter 514B, cooperative
apartment, dwelling unit, 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 235-20.5, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:
"(a) There is established a tax administration special fund, into which shall be deposited:
(1) Fees collected under sections 235-20, 235-110.9, and 235-110.91;
(2)[ ]] Revenues collected by the special
enforcement section pursuant to section 231-85; provided that in each fiscal
year, of the total revenues collected by the special enforcement section, all
revenues in excess of $500,000 shall be deposited into the general fund[ .];
(3) Fines assessed pursuant to section 237D-4."
SECTION 4. Section 237D-4, Hawaii Revised Statutes, is amended to read as follows:
"§237D-4 Certificate of registration. (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. Acquisition of additional transient accommodation units after payment of the one-time fee shall not result in additional fees.
(b) 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. [
of additional transient accommodation units after payment of the one-time fee
shall not result in additional fees.] Failure to meet the requirements
of this subsection shall be unlawful. The department may issue cease and
desist citations to any person who fails to conspicuously display the
registration or notice as required by this subsection. A cease and desist
citation issued pursuant to this subsection shall include a monetary fine of
$1,000 and may be issued once per day, per place for which the registration or
notice was issued.
(c) The registration identification number issued pursuant to this section together with the disclosure set forth in the sentence immediately following, shall be provided on a website or by online link and displayed in all advertisements, solicitations, and notices on websites or through other online communication media regarding the transient accommodations for which the registration identification number is issued, and confirmation of compliance with this requirement shall be a condition to the listing or posting by any transient accommodations broker of any such advertising, solicitation, or other notice. The required disclosure shall be: "THIS IS A HAWAII TRANSIENT ACCOMMODATIONS GOVERNED BY HAWAII LAW. HAWAII TRANSIENT ACCOMMODATIONS TAXES MUST BE PAID ON THE GROSS RENTS COLLECTED BY AN OPERATOR FROM ANY PERSON RENTING HAWAII TRANSIENT ACCOMMODATIONS. HAWAII LAW ALSO PROVIDES FURTHER REQUIREMENTS OF A TRANSIENT ACCOMMODATIONS OPERATOR."
(d) 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.
(e) If the license fee
is paid, the department shall not refuse to issue a registration or revoke or
cancel a registration for the exercise of a privilege protected by the First
Amendment of the Constitution of the United States, or for the carrying on of
interstate or foreign commerce, or for any privilege the exercise of which,
under the Constitution and laws of the United States, cannot be restrained on
account of nonpayment of taxes, nor shall section 237D-14 be invoked to
restrain the exercise of such a privilege, or the carrying on of such commerce.
(f) 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 the same as that prescribed by
section [ 231-34] 231-35 for individuals, corporations, or
officers of corporations, as the case may be, for violation of that
SECTION 5. Act 326, Session Laws of Hawaii 2012, is amended as follows:
1. By adding a new section to read:
"SECTION 2A. Commencing with the regular session of 2016, the department of taxation shall submit a report of its findings and recommendations regarding the implementation of this Act, including any proposed legislation to improve the enforcement of this Act, to the legislature no later than twenty days prior to the convening of each regular session."
2. By amending subsection (h) of section 2 to read:
"(h) For the purposes of this section:
contact" means [
an individual or company contracted by the operator of
the transient accommodation to provide services required by this section.
Nothing in this section shall be deemed to create an employer-employee
relationship between an operator and its local contact.] either:
(1) Any individual, who for compensation or valuable consideration, is employed as an employee by the operator of a transient accommodation to provide services required by this section, and this individual may provide these required services for a single operator only;
(2) A real estate broker, real estate salesperson, or condominium hotel operator pursuant to chapter 467; or
(3) A person authorized to manage the premises or a person who is an owner of the premises or who is authorized to act for or on behalf of the owner for the purposes of service of process and receiving and receipting for rents, notices, and demands.
"Relevant information" means the operator's name, address, contact information, registration identification number issued pursuant to section 237D-4, and website address if advertising or soliciting the transient accommodation on the Internet."
3. By amending section 4 to read:
4. This Act shall take effect on July 1, 2012; provided that this Act shall be
repealed on December 31, [
SECTION 6. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.
SECTION 7. This Act shall take effect on July 1, 2112.
Vacation Rentals; Transient Accommodations Tax; Registration; Advertisements
Extends Act 326, SLH 2012, for one year. Requires DOTAX to submit an annual report to the legislature on the implementation of Act 326, SLH 2012. Authorizes DOTAX to enforce civil penalties for operators and plan managers who fail to display the certificate of registration and registration ID numbers for transient accommodations. Authorizes fines to be deposited into the Tax Administration Special Fund. Amends the definitions of "local contact" and "transient accommodations". (SB519 HD2)
The summary description of legislation appearing on this page is for informational purposes only and is not legislation or evidence of legislative intent.