Mar 04

Legislative Update March 4, 2017

Aloha.   In this edition

1) Half way Update. 

2) Membership Drive.   

3) Legislator Contact Info. 


Half way Update

First of all, many thanks to the members who wrote, called or emailed the legislators last week to share their opposition to two bills – one to increase our property taxes and one to require accommodation brokers (VRBO, AirBnB) to collect and remit taxes on our behalf.  The blitz campaign was successful as the legislators heard our voice.   While we knew the results of the votes on Tuesday, it wasn’t until last night that the amendments to the bills were made public.

SB683 and SB686.  Increase to property tax   SB683 was a bill to amend the State Constitution to allow the counties to collect property taxes to fund the State’s obligation to pay for education.  This bill has turned into a call for a state-wide referendum on the proposed tax increase.   SB686 is a bill to increase property taxes on those who own residential property which is rented out and on vacation rental owners.  We would be hit with both taxes.    The bill was significantly amended in committee and now the residential investment tax applies only to properties valued at over $2 million.  If you are fortunate enough to own a property with that value, your property tax bill will increase by $15,000 per year under this bill.  However, for everyone else, this change is a huge win.  It was definitely something to celebrate.   The section applying property tax to vacation rental properties remained unchanged.  If your rental rate is over $150 per night, the tax rate would be $5 per day, regardless of occupancy.  For rental rates under $150, the tax rate would be $3 per day.  So, for most people, that will be an additional $1825 of property tax per year.  RBOAA will continue to work on this aspect of the bill.  As the bill moves forward, we will call upon you again.    Remember:

  1. We already pay property taxes which are 3 to 4 times higher than residential property owners.
  2. We already collect and remit TAT
  3. While education benefits everyone, it puts the burden of the cost of education on a few.
  4. This bill is protectionist and isolationist and will only result in decreased investment in Hawaii.  It is nothing more than an attack on tourists and an attack on companies who rent accommodation to others.

The Senate Bills go to a vote on the floor of the Senate Tuesday, March 7, 2017 and then go over to the House for consideration.   The two companion bills in the House of Representatives – HB 180 and HB 182 – now differ significantly from the Senate versions.  However, they appear to be stalled and while they could resurrect, it is likely only the Senate versions will move forward.    Senator Thielen, an ardent anti-vacation rental advocate, is conducting a survey.  Feel free to tell her to vote no on SB683.

HB 1471 - Advertising Platforms as Tax Collection Agents   This bill became very complicated and very onerous after an earlier committee amended the bill to make it mandatory for advertising platforms to become tax collection agents.  The move to make it mandatory has two implications.  1) It sets us on the path to become a regulated industry – something we fought tooth and nail against a few years ago.  2) For advertising platforms who do not want to or cannot become tax collectors (think VRBO and HomeAway), they will not be able to accept advertisements from Hawaii vacation rental owners.  Either way, the amendments were designed to shut us down.    The House Finance committee amended the bill, acknowledging some of RBOAA’s concerns, but unfortunately, only our minor concerns.   VRBO / Expedia testified for the first time (in my memory at least) against the bill, pointing out they would be forced out of Hawaii if this bill passed.  However, the Finance committee did not amend the bill to allow VRBO to voluntarily comply with the legislation. It did allow advertisers with fewer than 3000 listings to voluntarily comply.    Here is where it gets interesting though.  The committee voted 4 in favor, 9 in favor with reservations and 2 opposed.  This can be interpreted to mean that if this was the final vote, it would not pass as those voting with reservations would likely vote no if this was the final version.   It is known that Governor Ige wants this bill to pass but he wants certain language in it.  Current thinking is that the language he wants is not in there yet.  RBOAA doesn’t have a good crystal ball on this bill, but there is reason to believe it will change significantly before the session ends.  The Senate version of this bill, which RBOAA prefers, did not make it out of committee.   The House will vote on this bill on Tuesday and send it to the Senate. If it wasn’t for the fact that Gov. Ige wants this bill passed, there is a fair chance that the House would reject the bill on Tuesday.   However, most likely, the bill will go to the Senate for further work.   RBOAA would like to see this bill fail on Tuesday but the chances of that happening are slim to nil.   This bill was never close to being good legislation but we had been optimistic it could be improved.  Now, we simply have to stop this bill.    Remember:

  1. The bill makes transient vacation rental owners the only taxpayers in the USA who are required to use a private company to oversee their tax compliance.
  2. Making it mandatory for advertising platforms to become tax collectors is a very negative attack on legal vacation rental operators.  This is either the first step in making vacation rentals a regulated industry in Hawaii or an attempt to ban advertising platforms from accepting advertisements in Hawaii.
  3. The tourist industry is dependent on legal vacation rentals to provide accommodation for the tourists who visit the islands every year.
  4. Those of us who are operating legally are paying GET and TAT correctly and on time and are in compliance with my county zoning requirements.  We don’t need a private company to police us.
  5. The bill provides for private companies to share your tax information with the Counties.  Under US law and under Hawaii law, this is illegal.
  6. The bill offers no consumer protection to owners or to travelers.
  7. The advertising platforms will choose to stop accepting Hawaii advertisers rather than comply with all the onerous requirements.  That will lead to a drop in TAT of $100 million per year.
  8. The tax collection agents will increase the fees charged to vacation rental owners.  Vacation rental owners are not getting rich off their investments in Hawaii.
  9. The state will pay the tax collection agents to collect taxes the State now collects for free

All the other bills we were watching have quietly gone away, for now.

Membership Drive

“Mahalo” to all of you who renewed your membership and/or made a donation to RBOAA this year.  We would not be able to do what we do without your support.     We have engaged our lobbyist in Honolulu already this year and he has been of great help so far.  But, he is not cheap!   In a recent study of some of the more popular owner rental web sites, there appears to be more than five thousand owner-managed vacation rental properties in Hawaii.  That number dwarfs our membership numbers so we know there are a lot of owners out there who might not be aware of RBOAA, not aware of all the good work we have done, and all of the good we will continue to do on your behalf.   We need to grow our membership in order to continue on as we have in the past.

Please ask anyone you know who owns a vacation rental property to visit our web site and become a member or make a donation today.  We all have neighbors, friends, or maybe even family who would benefit.  Please don't assume they are aware of RBOAA.  We are all in this together and all of you can act as a small army of recruiters.  Please do your part and help us spread the word.     Help us make sure everyone who self manages a vacation rental property in Hawaii is aware of the opposition we all face and that RBOAA is here to help.     So please, right now, please renew your membership at and click on the Donate — Click Here” button.   Remember, none of your executive team is paid – we are all volunteers.

Legislator Contact Information

Hawaii Members of State Senate

Baker ,  Rosalyn H. (D) 808-586-6070
Chang ,  Stanley (D) 808-586-8420
Dela Cruz ,  Donovan M.(D) 808-586-6090
English ,  J. Kalani (D) 808-587-7225
Espero ,  Will (D) 808-586-6360
Gabbard ,  Mike (D) 808-586-6830
Galuteria ,  Brickwood (D) 808-586-6740
Green ,  Josh (D) 808-586-9385
Harimoto ,  Breene (D) 808-586-6230
Ihara ,  Les Jr. (D) 808-586-6250
Inouye ,  Lorraine R. (D) 808-586-7335
Kahele ,  Kaiali‘i (D) 808-586-6760
Keith-Agaran ,  Gilbert S.C. (D) 808-586-7344
Kidani ,  Michelle N. (D) 808-586-7100
Kim ,  Donna Mercado (D) 808-587-7200
Kouchi ,  Ronald D. (D) 808-586-6030
Nishihara ,  Clarence K. (D) 808-586-6970
Rhoads ,  Karl (D) 808-586-6130
Riviere ,  Gil (D) 808-586-7330
Ruderman ,  Russell E. (D) 808-586-6890
Shimabukuro ,  Maile S.L.(D) 808-586-7793
Taniguchi ,  Brian T. (D) 808-586-6460
Thielen ,  Laura H. (D) 808 587 8388
Tokuda ,  Jill N. (D) 808-587-7215
Wakai ,  Glenn (D) 808-586-8585

Hawaii Members of House of Representatives

Belatti ,  Della Au (D) 808-586-9425
Brower ,  Tom (D) 808-586-8520
Cachola ,  Romy M. (D) 808-586-6010
Choy ,  Isaac W. (D) 808-586-8475
Creagan ,  Richard P. (D) 808-586-9605
Cullen ,  Ty J.K. (D) 808-586-8490
DeCoite ,  Lynn (D) 808-586-6790
Evans ,  Cindy (D) 808-586-8510
Fukumoto ,  Beth (R) 808-586-9460
Gates ,  Cedric Asuega (D) 808-586-8460
Har ,  Sharon E. (D) 808-586-8500
Hashem ,  Mark J. (D) 808-586-6510
Holt ,  Daniel (D) 808-586-6180
Ichiyama ,  Linda (D) 808-586-6220
Ing ,  Kaniela (D) 808-586-8525
Ito ,  Ken (D) 808-586-8470
Johanson ,  Aaron Ling (D) 808-586-9470
Keohokalole ,  Jarrett (D) 808-586-8540
Kobayashi ,  Bertrand (D) 808-586-6310
Kong ,  Sam Satoru (D) 808-586-8455
Lee ,  Chris (D) 808-586-9450
LoPresti ,  Matthew S. (D) 808-586-6080
Lowen ,  Nicole E. (D) 808-586-8400
Luke ,  Sylvia (D) 808-586-6200
Matsumoto ,  Lauren Kealohilani (R) 808-586-9490
McDermott ,  Bob (R) 808-586-9730
McKelvey ,  Angus L.K. (D) 808-586-6160
Mizuno ,  John M. (D) 808-586-6050
Morikawa ,  Dee (D) 808-586-6280
Nakamura ,  Nadine K. (D) 808-586-8435
Nakashima ,  Mark M. (D) 808-586-6680
Nishimoto ,  Scott Y. (D) 808-586-8515
Ohno ,  Takashi (D) 808-586-9415
Onishi ,  Richard H.K. (D) 808-586-6120
Oshiro ,  Marcus R. (D) 808-586-6700
Quinlan ,  Sean (D) 808-586-6380
Saiki ,  Scott K. (D) 808-586-8485
San Buenaventura , Joy A. (D) 808-586-6530
Say ,  Calvin K.Y. (D) 808-586-6900
Souki ,  Joseph M. (D) 808-586-6100
Takayama ,  Gregg (D) 808-586-6340
Takumi ,  Roy M. (D) 808-586-6170
Thielen ,  Cynthia (R) 808-586-6480
Todd ,  Chris (D) 808-586-8480
Tokioka ,  James Kunane(D) 808-586-6270
Tupola ,  Andria P.L. (R) 808-586-8465
Ward ,  Gene (R) 808-586-6420
Woodson ,  Justin H. (D) 808-586-6210
Yamane ,  Ryan I. (D) 808-586-6150
Yamashita ,  Kyle T. (D) 808-586-6330

Mahalo, Neal

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