States throughout the U.S. have been trying to crack down on vacation rental companies like Airbnb, and it appears Hawaii will succeed.
On Tuesday, lawmakers approved separate bills that would require websites like Airbnb or VRBO to collect and pay taxes on behalf of short-term rental hosts, all in an attempt for the government to gather taxes from illegal rentals.
Honolulu is said to have 800 legal vacation rentals and bed-and-breakfast accommodations, and about 10 times as many illegal ones which are not paying taxes. While travelers enjoy vacation rentals, lawmakers say it's the government's duty to get tax revenue from these illegal listings.
"We're trying to capture the taxes from people that are doing the business in Hawaii. Which is the state's responsibility," said Richard Onishi, a Democrat representing Hilo and Volcano.
Hotels see this as a great move forward. Mufi Hannemann, the president of the Hawaii Lodging and Tourism Association, said, "We want a level playing field. If we're paying taxes, if we're paying fees, we want them to do the same."
As for vacation rentals, they see these bills, which would require them to turn over personal information of their users, as violating federal law.
Airbnb said that HB 419 HD2 SD2, one of the "does not contemplate a fair process for regulating the industry but simply seeks to impose harsh fines."
The vacation rental company added, "Hundreds of millions, if not billions, of dollars in tourist revenue could be at risk if this bill were adopted as currently proposed."
Expedia Group, which owns VRBO.com and HomeAway.com, believe these bills would threaten Hawaii's tourism economy which is already at a tipping point toward overtourism.
Lawmakers will meet later this month to discuss the bills. Currently, Governor David Ige is withholding comments on the bills until they've undergone a legal and departmental review.
"We are missing out on perhaps $100 million in tax revenues," Senator Wakai, one of the leading lawmakers on the bills, said.
"It's a revenue bill. So hopefully bring in more TAT and general excise tax revenue and it's also a bill that puts everyone on a level playing field," said Rep. Richard Onishi, chair of the House Committee on Tourism and International Affairs. "The hotels all pay it, the timeshares pay it, it's just a matter of equity in terms of ensuring that the state is receiving the taxes that are supposed to be paid."
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