Tax & Regulatory Compliance

Transient Accommodations Taxes (TAT) and General Excise Use Taxes (GET)

State law requires the payment of Transient Accommodation Taxes and General Excise Taxes on “gross rental proceeds” collected for short term vacation rentals (less than 180 days). Gross rental proceeds are before expenses for cleaning, credit card fees, management fees, etc. as they are not allowed deductions. Please see The State of Hawaii Department of Taxation and tax filing forms TA1 & G45.

In addition to State General Excise Use Taxes collected by the State of Hawaii, the counties levy the following GET surcharges:
- City/County of Honolulu — 0.50%
- County of Kauai — 0.50%
- County of Hawaii — 0.25%
- County of Maui — 0.00%

These rates and surcharges are subject to change. Be sure to contact the state of Hawaii and the counties for the most recent information.

County Regulations

Each county in Hawaii has its own regulations (or lack thereof) for zoning and permitting of vacation rentals. Please see the links below to get the most accurate information from each of the counties. It may be of use to you to visit the planning department and planning commission web pages on each island on a regular basis to keep up to date with potential new rules and regulations that are in the works.

A summary of all ordinances on all islands is now available on the website of the Hawaii State Department of Commerce and Consumer Affairs. See Department of Commerce and Consumer Affairs for updated information posted on the department’s website.
You may also wish to view this general brochure from the state entitled Information for Owners of Rental Property (MAR 2014) (current as of April 2016).
Please note that property taxes will be significantly different for different kinds of properties. For example, apartments and residential houses have different rate structures. If you currently reside full-time on your property and claim a homeowner’s exemption, but are considering occasionally renting out a room or the whole property, you may lose your homeowner’s exemption which would most likely significantly raise your property taxes. Property tax rates and a summary of ordinances for all the islands are (the last time we looked) for 201/2018 are listed on the following website: www.localrealestatehawaii.com

Hawaii (Big Island)

The County of Hawaii has a new ordinance that will create new rules on all TVRs that are not owner occupied. The final rules for the ordinance are expected to be published by April 19, 2019. There is a Facebook Page “Hawaii TVR Alliance” where owners can discuss TVR issues and get more information.

More Information

Kauai

Kauai has a permitting process in place and quite a bit of information on their website that is relatively easy to find.

More Information

Maui

April 2019:
Maui County Council is discussing a large increase in property taxes. They are talking about moving to $15.41 from $9.28 per $1,000 assessed value. Maui County Council, which has nine members — of which six are new this year — will make a decision on this increase this month. Council members appear to view that visitors should pay more to cover the wear and tear on County facilities and services. Accordingly, Council seeks to increase taxes on short-term vacation rentals and hotels, while reducing all other property tax rates. We have not identified any Maui County group of owners. We will update you if an organization like RBOAA is formed on Maui; please let us know if you have any information on such a development. Until a group is formed in Maui County, owners of vacation rentals will need to take individual direct action.

Maui’s website is a little difficult to navigate through. On their home page is a little box on the left hand side with a binoculars picture. This is where you can input your searches. Start here with the website and then input “Transient Vacation Rentals” into the search box choosing “What is a Transient Vacation Rental?” You will find definitions and answers to frequently asked questions.

See this link for homes compared to condos: www.co.maui.hi.us

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Oahu (City and County of Honolulu)

The website of the City and County of Honolulu, under the Department of Planning and Permitting has information about Transient Vacation Rentals. According to the section under frequently asked questions, transient vacations rentals have been prohibited outside of resort zones since 1986. If you are planning to operate a new TVR, you should visit the county’s web pages and must do your due diligence. See the following webpage and then visit the links under Transient Vacation Units and Bed and Breakfast Homes.

In Honolulu, the battle continues for the right to use your property as a vacation rental.
You can get information at http://oahustralliance.org & www.honoluludpp.org

More Information

Act 204

Hawaiian State Law has numerous requirements for vacation property owners. It is recommended that all owners become very familiar with ACT 204 which took affect on January 1, 2016. The new law mandates stiff penalties for failure to follow its provisions. To read RBOAA’s discussion of the law see here. To read the entire bill from the Hawaiian Government website, click here. In addition to state law, each county has its own zoning and other requirements which each property owner should make an effort to understand.

A summary of Act 204’s requirements is listed below:

1. Obtain a General Excise Tax (GET) License
2. Obtain a Transient Accommodations Tax (TAT) License
(You can obtain both of the above by submitting Form BB-1 to the Hawaii Department of Taxation)
3. Post your Tax ID # on your web site advertisements such as VRBO and a copy of your licenses in your accommodations
4. If you live “off-island” you are required to have an on-island Local Contact.
5. You must communicate the name and contact info of your local contact to your guests and also post it in your accommodations.
6. You do NOT have to use realtor or property manger, unless they are renting or managing the unit for you.
7. File your non-resident N-15 State Income Tax Return.

8. File GE-45 (General Excise) taxes quarterly or monthly as well as your Annual GE-49 form.
[download document] Contains New General Instructions for Filing G-45/49 (Rev 2011)

9. File TA-1 (Transient Accommodation) taxes quarterly or monthly
[download document] Contains New General Instructions for Filing TA-1 (Rev 2011) as well as your Annual TA-2 form.
[download document] Contains New Instructions for Filing TA-2 (Rev 2011)

Please consult with your tax advisor if you have any questions.

More Information

The State of Hawaii’s Department of Commerce and Consumer Affairs regulates rental property.
Please click on the following link to download a copy of the current brochure published by DCC.
Information for Owners of Rental Property (April 2016).

Click on the link below for additional information:
Transient Accommodation Rental Fact Sheet

Please consult with your tax advisor if you have any questions.