Airbnb is one of the most popular online alternative accommodation companies which has led the way for House Bill 1850 to pass the legislature. House Bill 1850 allows transient accommodation companies to act as brokers to register as tax collection agents to collect and remit general excise and transient accommodations taxes on behalf of operators using their services. It also attempts to ensure that the subject property is in compliance with applicable land use laws.
Alternative accommodation companies include the likes of Airbnb, Homeaway and VRBO.com and provide a platform for private party hosts (operators) to post their avaiable vacation unit online for potential guests to view and reserve. According to PBN, Airbnb has approximately 10,000 listings in the Hawaiian Islands. The controversy over the use of alternative accommodation companies stems from residents who are opposed to having illegal short-term rentals in residential areas which violate state and county land use laws. There is also the unknown effect of how this will detract from business with traditional hotels and short-term lodging in Hawaii. Those who are in support of House Bill 1850 see it as a means of increasing revenue to the State while decreasing the burden of tax filings by private party hosts who benefit from the income it provides.
There are many residents who rely upon the supplemental income of short-term rentals to make ends meet. These hosts view the concept of home sharing as a positive solution which provides a place for visitors to enjoy an authentic experience in Hawaii while giving additional revenue to the State through their business. Airbnb has posted a community impact report for Hawaii in which they provide some details to hosts and the vacation rental industry.
As it stands, weather or not a host uses online agents like Airbnb, property owners renting out space in their home illegally in residential areas are breaking country land use ordinances and could be subject to a $1,000-a-day fine. Being that the transient accommodation broker is the entity registering with the State to collect and remit taxes and not the individual host, those opposed to House Bill 1850 feel that this allows illegal vacation rental operators to remain anonymous even through a host is required to provide written verification of compliance with county land use laws.
[author title=”About the Author”]