Bill Text: HI SCR131 | 2018 | Regular Session | Amended

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Bill Title: Urging The Department Of Taxation To Enforce Section 237d-4, Hawaii Revised Statutes, Regarding Online Advertising For Transient Accommodations To Ensure Collection Of Transient Accommodation Taxes And General Excise Taxes From Vacation Rentals.

Spectrum: Partisan Bill (Democrat 9-0)

Status: (Introduced - Dead) 2018-03-28 - Report adopted, as amended (SD 1) and referred to WAM. [SCR131 Detail]

Download: Hawaii-2018-SCR131-Amended.html

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THE SENATE	S.C.R. NO.	131
TWENTY-NINTH LEGISLATURE, 2018		S.D. 1
STATE OF HAWAII

SENATE CONCURRENT

RESOLUTION

 

 

URGING THE DEPARTMENT OF TAXATION TO ENFORCE SECTION 237D-4, HAWAII REVISED STATUTES, REGARDING ONLINE ADVERTISING FOR TRANSIENT ACCOMMODATIONS TO ENSURE COLLECTION OF TRANSIENT ACCOMMODATION TAXES AND GENERAL EXCISE TAXES FROM VACATION RENTALS.

 

 

     WHEREAS, this body passed a law in 2015 to enable the Department of Taxation to efficiently identify vacation rentals that are operating without being appropriately registered to do so, thereby avoiding the transient accommodations or general excise tax, simply by looking at online advertisements for transient accommodations; and

 

     WHEREAS, Act 204, Session Laws of Hawaii 2015 (Act 204), amended section 237D-4, Hawaii Revised Statutes, to:

 

     (1)  Require the posting of the registration identification number, or electronic link thereto, of the operator or plan manager of the transient accommodation conspicuously on any online advertisement for a transient accommodation or resort time share vacation interest, plan, or unit in Hawaii;

 

     (2)  Authorize the Department of Taxation to issue citations to the transient accommodation operator, time share vacation plan manager, or transient accommodations broker for failure to post the registration identification number conspicuously, thereby enabling the Department to easily identify tax scofflaws simply by reviewing online advertisements without having to also prove actual rentals of units; and

 

     (3)  Establish substantial fines for failure to post the registration identification number on an online advertisement, starting at $500 per day for the first offense and increasing to $5,000 per day for a third or any subsequent offense; and

 

     WHEREAS, aggressive enforcement of information-posting rules by the Department of Taxation will not drive the short term transient accommodations industry underground because it relies on online advertising to survive, but rather aggressive enforcement will serve to bring operators into speedy compliance with tax laws, as the amount of the violation will exceed the total unit rental revenue in many cases; and

 

     WHEREAS, the fact that online transient accommodations brokers may be shielded from liability under federal law should not be a reason for the Department of Taxation to refuse to enforce Act 204 and issue citations because the law contains a severability clause that would not render invalid the Department's ability to impose fines on an operator or plan manager for failure to comply with the law; and

 

     WHEREAS, the fact that the Department of Taxation has other obligations and may not have the personnel to search the Internet for violators is not a reason to fail to enforce the law, as other jurisdictions have hired contractors to go online and identify transient accommodations advertisements that fail to comply with section 237D-4, Hawaii Revised Statutes, and the Department is aware of this option and has the authority to enter into similar contracts, with the subsequent fines and increase in tax revenues likely to exceed the costs of such a contract; and

 

     WHEREAS, it is grossly unfair that some transient accommodations operators pay taxes, but a large proportion of operators do not; and

 

     WHEREAS, the significant number of operators failing to comply with information-posting laws and the lack of enforcement by the Department of Taxation undermine the foundation of the tax structure, which relies on voluntary compliance, and allowing scofflaws to remain at large, despite a simple remedy provided through Act 204, encourages more people to flout the tax laws; now, therefore,

 

     BE IT RESOLVED by the Senate of the Twenty-ninth Legislature of the State of Hawaii, Regular Session of 2018, the House of Representatives concurring, that the Department of Taxation is urged to enforce section 237D-4, Hawaii Revised Statutes, by regularly checking or hiring a contractor to regularly check online advertisements for transient accommodations for compliance with section 237D-4(c), Hawaii Revised Statutes; and

 

     BE IT FURTHER RESOLVED that the Department of Taxation is urged to issue citations, pursuant to section 237D-4(d), Hawaii Revised Statutes, to anyone who violates the information-posting requirements of section 237D-4(c), Hawaii Revised Statutes; and

 

     BE IT FURTHER RESOLVED that the Department of Taxation is requested to work with relevant county departments to gather and share information that is necessary and pertinent for the Department of Taxation to collect the full amount of taxes owed from transient accommodations operators and plan managers; and

 

     BE IT FURTHER RESOLVED that a certified copy of this Concurrent Resolution be transmitted to the Director of Taxation.

Report Title: 

Transient Accommodation Tax; Vacation Rentals; Online Advertising