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.   https://www.surveymonkey.com/r/2017crossover

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 www.rboaa.org 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 www.rboaa.org 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 senbaker@Capitol.hawaii.gov
Chang ,  Stanley (D) 808-586-8420 senchang@Capitol.hawaii.gov
Dela Cruz ,  Donovan M.(D) 808-586-6090 sendelacruz@capitol.hawaii.gov
English ,  J. Kalani (D) 808-587-7225 senenglish@capitol.hawaii.gov
Espero ,  Will (D) 808-586-6360 senespero@capitol.hawaii.gov
Gabbard ,  Mike (D) 808-586-6830 sengabbard@capitol.hawaii.gov
Galuteria ,  Brickwood (D) 808-586-6740 sengaluteria@capitol.hawaii.gov
Green ,  Josh (D) 808-586-9385 sengreen@capitol.hawaii.gov
Harimoto ,  Breene (D) 808-586-6230 senharimoto@capitol.hawaii.gov
Ihara ,  Les Jr. (D) 808-586-6250 senihara@capitol.hawaii.gov
Inouye ,  Lorraine R. (D) 808-586-7335 seninouye@capitol.hawaii.gov
Kahele ,  Kaiali‘i (D) 808-586-6760 senkahele@Capitol.hawaii.gov
Keith-Agaran ,  Gilbert S.C. (D) 808-586-7344 senkeithagaran@capitol.hawaii.gov
Kidani ,  Michelle N. (D) 808-586-7100 senkidani@capitol.hawaii.gov
Kim ,  Donna Mercado (D) 808-587-7200 senkim@Capitol.hawaii.gov
Kouchi ,  Ronald D. (D) 808-586-6030 senkouchi@Capitol.hawaii.gov
Nishihara ,  Clarence K. (D) 808-586-6970 sennishihara@capitol.hawaii.gov
Rhoads ,  Karl (D) 808-586-6130 senrhoads@Capitol.hawaii.gov
Riviere ,  Gil (D) 808-586-7330 senriviere@capitol.hawaii.gov
Ruderman ,  Russell E. (D) 808-586-6890 senruderman@capitol.hawaii.gov
Shimabukuro ,  Maile S.L.(D) 808-586-7793 senshimabukuro@capitol.hawaii.gov
Taniguchi ,  Brian T. (D) 808-586-6460 sentaniguchi@capitol.hawaii.gov
Thielen ,  Laura H. (D) 808 587 8388 senthielen@Capitol.hawaii.gov
Tokuda ,  Jill N. (D) 808-587-7215 sentokuda@capitol.hawaii.gov
Wakai ,  Glenn (D) 808-586-8585 senwakai@capitol.hawaii.gov

Hawaii Members of House of Representatives

Belatti ,  Della Au (D) 808-586-9425 repbelatti@Capitol.hawaii.gov
Brower ,  Tom (D) 808-586-8520 repbrower@Capitol.hawaii.gov
Cachola ,  Romy M. (D) 808-586-6010 repcachola@Capitol.hawaii.gov
Choy ,  Isaac W. (D) 808-586-8475 repchoy@Capitol.hawaii.gov
Creagan ,  Richard P. (D) 808-586-9605 repcreagan@Capitol.hawaii.gov
Cullen ,  Ty J.K. (D) 808-586-8490 repcullen@Capitol.hawaii.gov
DeCoite ,  Lynn (D) 808-586-6790 repdecoite@Capitol.hawaii.gov
Evans ,  Cindy (D) 808-586-8510 repevans@Capitol.hawaii.gov
Fukumoto ,  Beth (R) 808-586-9460 repfukumoto@Capitol.hawaii.gov
Gates ,  Cedric Asuega (D) 808-586-8460 repgates@Capitol.hawaii.gov
Har ,  Sharon E. (D) 808-586-8500 rephar@Capitol.hawaii.gov
Hashem ,  Mark J. (D) 808-586-6510 rephashem@Capitol.hawaii.gov
Holt ,  Daniel (D) 808-586-6180 repholt@Capitol.hawaii.gov
Ichiyama ,  Linda (D) 808-586-6220 repichiyama@Capitol.hawaii.gov
Ing ,  Kaniela (D) 808-586-8525 reping@Capitol.hawaii.gov
Ito ,  Ken (D) 808-586-8470 repito@Capitol.hawaii.gov
Johanson ,  Aaron Ling (D) 808-586-9470 repjohanson@Capitol.hawaii.gov
Keohokalole ,  Jarrett (D) 808-586-8540 repkeohokalole@Capitol.hawaii.gov
Kobayashi ,  Bertrand (D) 808-586-6310 repkobayashi@Capitol.hawaii.gov
Kong ,  Sam Satoru (D) 808-586-8455 repkong@Capitol.hawaii.gov
Lee ,  Chris (D) 808-586-9450 replee@Capitol.hawaii.gov
LoPresti ,  Matthew S. (D) 808-586-6080 replopresti@Capitol.hawaii.gov
Lowen ,  Nicole E. (D) 808-586-8400 replowen@Capitol.hawaii.gov
Luke ,  Sylvia (D) 808-586-6200 repluke@Capitol.hawaii.gov
Matsumoto ,  Lauren Kealohilani (R) 808-586-9490 repmatsumoto@Capitol.hawaii.gov
McDermott ,  Bob (R) 808-586-9730 repmcdermott@Capitol.hawaii.gov
McKelvey ,  Angus L.K. (D) 808-586-6160 repmckelvey@Capitol.hawaii.gov
Mizuno ,  John M. (D) 808-586-6050 repmizuno@Capitol.hawaii.gov
Morikawa ,  Dee (D) 808-586-6280 repmorikawa@Capitol.hawaii.gov
Nakamura ,  Nadine K. (D) 808-586-8435 repnakamura@Capitol.hawaii.gov
Nakashima ,  Mark M. (D) 808-586-6680 repnakashima@Capitol.hawaii.gov
Nishimoto ,  Scott Y. (D) 808-586-8515 repnishimoto@Capitol.hawaii.gov
Ohno ,  Takashi (D) 808-586-9415 repohno@Capitol.hawaii.gov
Onishi ,  Richard H.K. (D) 808-586-6120 reponishi@Capitol.hawaii.gov
Oshiro ,  Marcus R. (D) 808-586-6700 repmoshiro@Capitol.hawaii.gov
Quinlan ,  Sean (D) 808-586-6380 repquinlan@Capitol.hawaii.gov
Saiki ,  Scott K. (D) 808-586-8485 repsaiki@Capitol.hawaii.gov
San Buenaventura , Joy A. (D) 808-586-6530 repsanbuenaventura@Capitol.hawaii.gov
Say ,  Calvin K.Y. (D) 808-586-6900 repsay@Capitol.hawaii.gov
Souki ,  Joseph M. (D) 808-586-6100 repsouki@Capitol.hawaii.gov
Takayama ,  Gregg (D) 808-586-6340 reptakayama@Capitol.hawaii.gov
Takumi ,  Roy M. (D) 808-586-6170 reptakumi@Capitol.hawaii.gov
Thielen ,  Cynthia (R) 808-586-6480 repthielen@Capitol.hawaii.gov
Todd ,  Chris (D) 808-586-8480 reptodd@Capitol.hawaii.gov
Tokioka ,  James Kunane(D) 808-586-6270 reptokioka@Capitol.hawaii.gov
Tupola ,  Andria P.L. (R) 808-586-8465 reptupola@Capitol.hawaii.gov
Ward ,  Gene (R) 808-586-6420 repward@Capitol.hawaii.gov
Woodson ,  Justin H. (D) 808-586-6210 repwoodson@Capitol.hawaii.gov
Yamane ,  Ryan I. (D) 808-586-6150 repyamane@Capitol.hawaii.gov
Yamashita ,  Kyle T. (D) 808-586-6330 repyamashita@Capitol.hawaii.gov

Mahalo, Neal www.rboaa.org info@rboaa.org