Transient Accommodations Taxes and General Excise Use Taxes. State law requires the payment of Transient Accommodation Taxes and General Excise Taxes on “gross rental proceeds” collected for short term vacation rentals (less than 180 days). Gross rental proceeds are before expenses for cleaning, credit card fees, management fees, etc. are deducted as they are not allowed deductions. Please see the State of Hawaii Department of Taxation and tax filing forms TA1 (currently 10.25%), G45 (currently 0.4167%), and Schedule GE (allowable general excise tax exemptions/deductions) for further details. Watch for a change in form TA1 at the beginning of 2018 to accommodate the increase in Transient Accommodations Taxes. See below.
Increase in Transient Accommodation Taxes in 2018. In the summer of 2017, in a Special Session of the State Legislature, the state of Hawaii enacted Senate Bill 4 which has become law as Act 1. The Act increased the Transient Accommodations tax rate from 9.25% to 10.25% and extended the County and City of Honolulu surcharge of 0.05% on General Excise Taxes. Click on DEPARTMENT OF TAXATION ANNOUNCEMENT NO. 2017-10 to view the details of Act 1.