Aloha and Mele Kalikimaka!
We had a challenging and ultimately successful 2015, made possible through efforts of members and your Executive Committee, and it’s time to get ready for what lies ahead in 2016.
Most notably, new rules affecting our vacation rentals take effect on January 1, 2016. Please see Section 3 below to ensure you are ready.
While the future offers uncertainty, one thing is for sure: Without you, our members, we would not be in the position we’re all in today — still able to operate our legal vacation rentals in the State of Hawaii. You keep us going, and it’s your contributions, past and future, that anchor this update.
A hearty ‘mahalo’ from me and from all of your Executive and volunteers. Please keep up your volunteer support as well as, and especially, your financial support, for RBOAA —it keeps us all going!
In this newsletter edition, we cover a lot of territory!
- Upcoming Legislative Session
- Funding and Membership
- New Regulations Effective January 1, 2016
- 2016 RBOAA Executive Committee
- Ocean Safety
- Next Steps
- Upcoming Legislative Session
- Hawaii State legislators have until the end of January to introduce bills, but we are already hearing rumors that certain bills from 2015 may be resurrected, possibly including the omnibus bill to establish vacation rentals as a regulated industry.
- At the County level, all four counties are considering bylaws which would impact the vacation-rental industry, whether the accommodation is owner-operated, or handled by a property manager. Some of these measures are tax collection-driven, some of these are neighborhood-driven (“I don’t want rentals next door to me”), and some of these are quality-driven (“Tourists shouldn’t be staying in unsafe accommodation”). We have established a County-Relations Committee to monitor and respond to County action.
- It is critical that all owners of vacation rentals collect and remit taxes. And it’s just as critical that all operators of vacation rentals are good neighbors. And it’s essential that we take the time and effort to ensure Hawaii residents know about the economic benefits generated by legal vacation rentals and our guests — from higher property taxes paid on Maui, to restaurant meals and activities purchased by our guests, to the Hawaiians we employ and the products we purchase in Hawaii for our vacation-rental businesses.
- Put simply, the economic contribution made by owners of legal vacation rentals is significant and it is an important message to share. Some of our opponents are spreading the opposite message, saying we and our guests do not contribute to the economy, so we need to ensure the facts get out there. Delivering that message takes volunteer time or marketing dollars. RBOAA is working with our industry partners on this issue, but you can help spread the word.
- Funding and Membership
- We spent over $27,000 on legal and lobbying fees this year, and the final positive outcome makes the investment not just worthwhile, but essential. We will likely spend that much again next year. We are grateful that our members stepped up and donated funds to make these investments in skilled support. Rest assured that our opponents will continue to do the same.
- We have a committed membership and, as our volume of submitted testimony last session demonstrated, it’s a passionate, active, and credible membership. Every time I speak with the media, or our industry partners or legislators, one of the first questions is HOW many members does RBOAA have? The battle to continue to operate our vacation-rental properties is a high-stakes business, and numbers matter. The more members we have, the greater the impact our voice has, the more credibility we have, and the harder it is for our opponents to put an easy end to our vacation-rental businesses.
- So please, right now, please renew your membership at www.rboaa.org and click on the “Donate — Click Here” button. Your membership fees and your additional donations are essential in giving us the ability to hire the government-relations and legal advisors who help shape our knowledge and the recommendations we make to legislators and policy makers. But we know there is no better advocate for owners of vacation-rental properties than owners themselves, so your donations and memberships help us defray the cost of travelling to Honolulu to testify when doing so is necessary to make the difference.
- Members are vitally important for another reason: RBOAA is an entirely volunteer-run organization. The more hands we have, the lighter the load for us all. So please volunteer by emailing email@example.com. We will get back to you, I promise, but sometimes not as quickly as we’d like. Remember, we are all volunteers with the same full-time lives and pressures as our members.
- Please spread the word about RBOAA to your friends and neighbors. Ensure they sign up for the newsletter and take out a membership. But first, please renew your membership at www.rboaa.org.
- Act 204 Takes Effect January 1, 2016
- On July 2, Governor Ige signed Act 204 into law. Generally, this bill covers Local Contacts, Advertising, and Tax Compliance for Transient Rentals.
- Act 204 is a very good outcome for RBOAA members and all those who own or own and operate transient vacation rental accommodations in Hawaii.
- Act 204 replaces Act 326 which ceases to have force on December 31, 2015. Act 204 negates the need to extend Act 326 as certain key provisions of Act 326 are carried forward indefinitely within the Transient Accommodations Tax Act (a full synopsis of the Act is presented at the end of this newsletter).
Act 204 at a glance
If you don’t live on the same island as your vacation rental, you need to name a Local Contact. The Local Contact is a person or a company resident on the island (when companies are local contacts they must have someone who resides on the island). The Local Contact is not necessarily a real estate agent and is not necessarily an employee of the owner.
You must post your Hawaii Tax ID number (your TAT ID number) conspicuously in all advertisements and in your rental (Note: Operators have always been required to post their GET number in their rental);
For many owners, the TAT and GET numbers are the same. For some owners, they are not. In either case, best practice is to post a copy of both certificates in your rental.
You must identify your Local Contact by name, phone number and email address to your guests before they check in and within the rental property;
There is no longer any requirement for the HOA to collect and remit Tax ID and Local Contact information;
Your online advertising system, i.e., VRBO, FlipKey, Airbnb, must ensure you have posted your Hawaii Tax ID (your TAT ID number) in your advertisement;
The same rules now apply to time shares and homes as to other transient accommodations; and,
The fines for non-compliance are very steep and include a monetary fine and a prohibition against operation.
4. 2016 RBOAA Executive Committee
The following individuals have volunteered to take on the task of guiding RBOAA through our next year. It is a big and unpaid job, so please provide your support to these dedicated folks by renewing your membership and donating, and by volunteering and staying active in RBOAA when we seek your testimony and participation.
President, Chair Media Relations & Industry Liaison Committees: Neal Halstead
Vice President, Chair, Government-Relations Committee: Meera Kohler
Secretary, Chair, County-Relations Committee: Annette Lohman
Treasurer: John Eckel
Chair, Membership Committee: Norbert Wolszon
Chair, Legal Review Committee: Vacant
5. Ocean Safety
The County of Maui has published an Ocean Safety Guide to help visitors and residents stay safe in the water.
The pamphlet is posted to our website and you can download and print it and post it at your property: www.rboaa.org/ocean-safety-guide
6. Next Steps
- There’s a lot to do, and we’ve asked you to continue to help. It’s all about sharing the load.
- So here are a few final thoughts aimed at making the work easier for us all:
- Build Strength: Please make sure your friends and neighbors are aware of RBOAA and aware of the legal requirements.
- Build Awareness: Find out who your local State Representative and Senator. If they are going to make laws that personally affect you and your business, it helps if they know you and if you know them.
- Build Resources: If you haven’t already done so, please renew your membership and donate to RBOAA. Visit www.rboaa.org and click on the “Donate — Click Here” button. Here is the direct link to allow a donation: https://www.rboaa.org/donate/. As noted earlier, we spent over $27,000 on legal and lobbying fees this year. We expect to have to spend that again in 2016 next year, and are grateful that our members stepped up and donated funds to make these investments in skilled support. Thank you for continuing to do so.
- Build Depth: We are still looking for members to help out on many projects, including volunteers to lead and to join our committees focused on County issues. If you are interested, please send a note to firstname.lastname@example.org.
Full detail on Act 204 . . .
This Act shall take effect on January 1, 2016.
- The preamble sees the legislature declare, per Section 521-43(f) of the Hawaii Revised Statutes, (the Landlord Tenant Code) that as a consumer-protection measure, an owner who lives out of state or on a different island than the rental unit shall designate an agent who resides on the same island to act on the owner’s behalf. The preamble explains that designating a “local contact” is essential in the case of an emergency or natural disaster, and for dealing with any questions, concerns, or property issues that might arise regarding the transient accommodation.
- The bill amends section 237D-1 of the Hawaii Revised Statutes (the Transient Accommodation Tax Act) to add a new definition — “Local Contact” — which it defines as: ““Local contact” means an individual residing on the same island as the transient accommodation or resort time share vacation unit or an entity with a place of business and at least one employee, officer, partner, member, or other person working on behalf of the company who is residing on the same island as the transient accommodation or resort time share vacation unit.”
- The bill amends section 237D-1 of the Hawaii Revised Statutes to add a new definition — “Transient Accommodations Broker” — which it defines as: “. . . any person or entity, including but not limited to persons who operate online websites, online travel agencies, or online booking agencies, that offers, lists, advertises, or accepts reservations or collects whole or partial payment for transient accommodations or resort time share vacation interests, units, or plans.”
- The bill amends the definition of “transient accommodations” in section 237D-1 of the Hawaii Revised Statutes to include single family dwelling and dwelling unit (Chapter 514B), so as to affirm that when such defined spaces are used for less than 180 consecutive days by a transient, the spaces are “transient accommodations” and fall subject to compliance with applicable statutes.
- The bill amends section 237D-4 of the Hawaii Revised Statutes relating to the display of the Hawaii Tax ID, i.e., the “Certificate of Registration,” (your TAT number) adding that, “The name, phone number, and electronic mail address of the local contact shall at all times be conspicuously displayed in the same place as the registration or the same place as the notice stating where the registration may be inspected and examined. Failure to meet the requirements of this subsection shall be unlawful.” [Note: RBOAA recommends that the information be displayed in the rental property.]
- The bill amends section 237D-4 of the Hawaii Revised Statutes to advise that, “The department [Department of Taxation] may issue citations to any person who fails to conspicuously display the registration or notice, or the local contact’s name, phone number, or electronic mail address as required. A citation issued pursuant to this subsection for each transient accommodation or resort time share vacation interest, plan, or unit in violation of this subsection shall include a monetary fine of not less than: (1) $500 per day, for a first violation for which a citation is issued; (2) $1,000 per day, for a second violation for which a citation is issued; and, (3) $5,000 per day, for a third and any subsequent violation for which a citation is issued. Any monetary fine assessed under this section shall be due and payable thirty days after issuance of the citation, subject to appeal rights provided under this subsection. Citations may be appealed to the director of taxation or the director’s designee.”
- The bill amends section 237D-4 of the Hawaii Revised Statutes relating to the advertisements for transient accommodations, to advise that “Any advertisement, including an online advertisement, for any transient accommodation or resort time share vacation interest, plan, or unit shall conspicuously provide: (1) The registration identification number (your TAT number) or an electronic link to the registration identification number of the operator or plan manager issued pursuant to this section; and, (2) The local contact’s name, phone number, and electronic mail address, provided that this paragraph shall be considered satisfied if this information is provided to the transient or occupant prior to the furnishing of the transient accommodation or resort time share vacation unit. Failure to meet the requirements shall be unlawful.” [Note: RBOAA recommends that owner operators include the Tax ID in every advertisement.]
- The bill amends section 237D-4 to advise that, “The department [Department of Taxation] may issue citations to any person, including operators, plan managers, and transient accommodations brokers, who violates [the ‘advertisement’] subsection. The penalties are the same as for operators, as noted above.
If you have any questions, RBOAA recommends you contact the Hawaii Department of Taxation.