Vacation Rental Bill Revived at the Legislature

March 25, 2012, 4:20 PM HST · Updated March 26, 9:37 AM
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Maui visitor rental owners may see new fees and increased regulation as a result of HB2078. Photo by Sonia Isotov.

By Sonia Isotov

Last Thursday, HB 2078 bill requiring non-resident vacation rental owners to hire local property managers was amended and unanimously passed by the Senate Tourism Committee.

Although a similar bill was killed in the Senate earlier, the Senate now has resurrected the issue by passing HB 2078. Proponents generally have testified that the bill seeks to collect millions of dollars in uncollected tax revenue from vacation rentals. Opponents argue that the requirements will only serve to add more cost to doing business in Hawaii while being confusing to enforce and regulate fairly.

HB 2078 now awaits a hearing in the Senate Commerce and Consumer Protection Committee, which is chaired by Maui’s State Senator Rosalyn Baker.

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Government entities, business associations, and other groups such as the state Department of Taxation, Honolulu City & County Department of Planning and Permitting, Maui Hotel & Lodging Association; Condominium Rentals Hawaii; Poipu Beach Resort Association; West Hawaii Property Services, Inc.; Waikoloa Vacation Rental Management, and other individuals have all testified in favor of the bill.

Testifying in opposition were also many organizations and numerous individuals, including but not limited to: Hawaii Vacation Rental Owners Association; Rental By Owners Awareness Association, The Travel Group; Trading Places International; Hanalei Bay Resort; Makana Mai Ka Lani; Hot Spot Tax Services; Sunshine & Rainbows, LLC; Humiston and Company, CPAs; and numerous individuals.

The HB 2078 would require non-resident vacation rental owners to hire local property managers, and a few other requirements would also apply:

  • 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.
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