Hawaii lawmakers consider legislation on short-term rentals

HONOLULU – A Hawaii House committee on Tuesday passed two bills that would allow the state to collect more tax revenue from the state’s proliferating vacation rental and bed-and-breakfast properties while the state’s counties figure out how to regulate them.

The committee passed two bills that would allow vacation rental websites such as Airbnb to collect taxes on behalf of short-term rental operators who list their properties online. Operators must currently pay their own taxes.

State House Tourism Committee Chairman Rep. Richard Onishi said he’s aiming for legislation that would collect taxes and make sure short-term rentals are legal under state and county law.

Airbnb and an internet industry representative testified against one bill that would require websites to take down rental listings that fail to comply with local laws. They argued federal law does not require websites to police user postings.

Hotel companies and unions testified in favour of this bill.

The bills must still be heard by other House committees. State Senate committees have scheduled a hearing on similar bills later this week.

Each Hawaii county has different rules for short-term rentals. But Honolulu County, which covers Oahu, has not issued new permits since 1989 even though such places are increasingly popular with travellers.

Hawaii Tourism Authority data from last year shows 7 per cent more visitors stayed in vacation homes in Hawaii last year compared to the year before. That outpaced the 3.5 per cent increase in visitors staying in hotels.

Only about 800 short-term rental properties on Oahu have permits, even though thousands of vacation rental properties are advertised online.

Gov. David Ige vetoed similar legislation last year out of concern it would facilitate illegal rentals. He said encouraging people to rent to visitors instead of residents could exacerbate Hawaii’s severe housing shortage and homelessness crisis.

Ige spokeswoman Cindy McMillan said it was too early to comment on specific measures this year. She said the governor’s main concern is that many vacation rental owners may not comply with county land-use laws.