Welcome to the Website of
Rental by Owner Awareness Association
Effective January 1, 2018, the Transient Accommodations Tax (TAT or Hotel Tax ) increased by 1% – from 9.25% to 10.25%. The rate applies to all transient rental accommodations statewide. See Department of Taxation Announcement No. 2017-10 for more information.
We are a Hawaii non-profit organization of property owners who have banded together to educate the public, property owners, and the legislature about “rental by owner” and to protect the rights of property owners. Our officers and committee members serve on a volunteer basis.
On our website, you will find a wealth of information that will help you to understand what we do and the issues that are important for owners to understand.
We invite you to participate with us and volunteer your time to assist us in the many activities in which we are engaged to protect the rights of property owners. Your annual membership fees and donations allow us to carry on our activities, to hire attorneys to advise us and to hire lobbyists to represent us to the Hawaiian legislature.
Please consider joining us or renewing your membership now.
- Property ownership in the Hawaiian Islands
- Compliance with state and county laws including taxation collection and remittance and county bylaws.
The cost for membership is $100.00 annually.
The 2018 Hawaii Legislative Session
The legislative session opened in January and ran through mid-May. There are three main bills we were dealing with at the end. To read about the details behind this posting see our May 2018 News Update.
The bill to require local contacts to be real estate agents which seems to resurface in some format each year, was fortunately defeated quickly.
SB2963 / HB 2605
This is the latest incarnation of the AirBnB bill, allowing the advertising platform to collect and remit taxes on the owners’ behalf. It has been around for 3 or 4 years now, always failing to pass. This year however, the bill took on a lot of additional provisions. It essentially assumed all vacation rental operators were criminal until proven otherwise. The bill has been deferred indefinitely which is the best possible outcome. the bill was so draconian that AirBnB had already backed away from it. , re very prone to pressure from unions, neighborhood groups, and anyone else who might vote.
The Hawaii Teachers union once again brought forward a Constitutional Amendment to require the TAT to be increased in order to fund education in the State of Hawaii. We saw this one go right to the bitter end last year before ultimately failing..
This year, the bill morphed into a proposed property tax on “investment real property.” The legislators didn’t define any rates and didn’t determine if any properties would be excluded from the definition. The referendum will go to a vote of the electorate, probably this November. After that, it will be up to the legislature to iron out the details.
At RBOAA, we are focused on the state legislature. We would love to be able to be involved at the county level as well, but, simply put, we need volunteers to take that on.
Here is what some our members have shared with us recently
On the Big Island of Hawaii, the county council was considering a regulatory framework around vacation rentals. There is a Facebook group called “Hawaii TVR Alliance” involved on this.
Maui recently passed a law which requires a property to be owned for five years before it can be turned into a vacation rental. Most vacation rentals on Maui are already in “resort zones” and would be unaffected by the new rules.
Maui is reported to be creating a new property classification with its own tax rates for vacation rentals. We expect all counties to consider new property tax classifications for short term rentals.
On Oahu/Honolulu, there continue to be numerous proposals to update their 30 year old set of regulations.
The 2017 Hawaii Legislative Session
The Hawaii Legislature opened its session in January and ran until mid-May. In the summer the legislature reconvened in special session to find ways to fund overruns on the Honolulu-Oahu Rail System. That session ended with an increase of 1% Transient Accommodation Taxes (Hotel Taxes) being imposed on hotels and vacation rentals. This brought the effective rate of Transient Accommodations (hotel) taxes up to 10.25% from 9.25%. Excise (sales) taxes, also imposed on hotels and vacation rentals, remained at 4.167% except in the city of Honolulu which has a higher rate.
During the 2017 session, we need to remember the previous year. One of the main criticisms of vacation rentals, whether true or not, is that we do not collect and remit taxes. The hotel industry uses that argument across the nation to support increased regulation of vacation rentals. Bills have repeatedly been put forward in an attempt to crack down on ‘tax cheats.’
Those themes became front and center in 2017. There were 20 bills on the table dealing with vacation rentals and they boil down to four themes.
- Advertising Platforms (such as VRBO) can collect and remit taxes on behalf of operators (you).
- Travelers to Hawaii and people and companies who provide accommodation to the travelers should pay more in tax.
- People who rent out property on a secondary or accessory basis should be limited to renting out no more than 60 nights per year and owning no more than one or two properties.
- Counties should be allowed to change zoning to eliminate transient vacation rentals. This proposal comes up each year, but this year, it only applied to the County of Kauai.
Please see the News Updates section of our website for an overview of the issues RBOAA dealt with during the year.
Archive: The 2016 Hawaii Legislative Session
This session saw the introduction of a number of bills that would have revisited some of the issues that eventually lead to the passage of Act 204 in 2015. See the details below in the “The 2015 Hawaiian Legislative Session.” None of them gained any traction and we believe that legislators are waiting to see how Act 204 plays out.
However, there continue to be numerous proposals floating around which would significantly and negatively impact the way we do things. The most onerous which comes up often is one we have seen implemented in other parts of the country; it is to make us into a regulated industry. This would require each of us to get a license from the state and/or the county, meet whatever criteria was set out (annual financial audits, surprise inspections, health and safety requirements, use of real estate agents, hiring only unionized cleaners), pay annual fees, etc. Being a regulated industry would also give the Dept. of Consumer Affairs in Hawaii the right to revoke your license at will – meaning, one day you could be legitimate and the next day you would have to cancel all your bookings. Yes, this is a worst case scenario, but it is not an improbable scenario.
Archive: The 2015 Hawaii Legislative Session. SB519 SD2 HD3 CD1 (“SB519”) is now Act 204
In January, we faced almost a dozen bills which could have impacted our transient vacation rentals. In the end, only one survived — SB519 – which became Act 204. On July 2, 2015 Governor Ige signed SB519 into law and is now known as Act 204. Generally, this bill covers Local Contacts, Advertising and Tax Compliance for Transient Rentals. The latest version of the bill was posted on the legislative website Saturday, May 2, 2015 and can be accessed through this link: SB519 CD1.htm
This is a very good outcome for RBOAA members and all those who own or own and operate rental accommodations in Hawaii. There is no doubt that we would be in a very different place, and a very disadvantageous place, had it not been for all the efforts of the RBOAA membership. We banded together and made strong, passionate and logical arguments to the Legislators.
Please note that this bill replaced Act 326 which ceased to have force on December 31, 2015. SB519/Act 204 carried forward indefinitely within the Transient Accommodations Tax Act certain key provisions of Act 326.
Archive: The following is an email sent to all Hawaiian Senators and Representatives offering to work together to resolve the challenges posed by TVR and the unsubstantiated claims being made:
Dear Hawaii Senators and State Representatives:
I’m writing to you in the hope that we might work together to put in place a consistent, effective approach to the state’s array of accommodation offerings including owner-operated transient accommodations and agency-managed transient accommodations.
This legislative session — and the four legislative sessions prior — have witnessed a number of bills introduced that offer widely disparate statements as to the definition, quantity, and legality of these types of transient accommodations. Whether the description is Individual Visitor Units (IVUs), Individually Advertised Units (IAUs), Transient Vacation Rentals (TVRs), or Transient Vacation Units (TVUs), we do not believe that Hawaii wishes to put an end to this type of accommodation, nor do we believe Hawaii wants to send a message that such options are to be denied to consumers. But the attacks on this popular vacation option has seen Hawaii legislators criticized for advancing bills that create monopolies for hotels or property managers.