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In wake of the deferment of bills SB 2089 and HB 1707, non-resident vacation rental owners of properties in Hawaii have had little time to relax. They’re still contending with other bills that could be passed at their expense.

Show me your ausweis!

Bill HB 2078 requires homeowners to publicly expose on the web their tax ID and personal info of the local agent

The latest bone of contention is over House Bill 2078, which if passed will require that all non-citizens who run transient – i.e. short-term – vacation rentals in the State of Hawaii display a registration ID or website where the ID can be found on all advertisements or solicitations. All non-residents must also “provide contact information for a local agent”.

Just as with the previous bills, non-resident vacation rental owners feel that HB 2078 unfairly targets them.

Many homeowners, and community organizer John Eckel is one of them, have expressed privacy concerns too. In his testimony against the bill, Eckel writes:

Display of a tax ID number could lead to intrusions on the privacy of owners and even potential identity theft. If a unique ID number can be created without the identity of the property owner being made known publicly, I would support the display of this number on all ads by residents and nonresidents alike.

Homeowners argue that requiring a local contact person included on ads clutters the message and confuses prospective guests about who they’re working with. Eckel again raises privacy related concerns:

Listing a local contact… [is] a violation of the privacy right of the local contact person. Further, if the name of the local contact were publicly available, it could easily enable criminals to falsely claim to be the emergency contact person to facilitate crimes on unsuspecting guests.

Homeowners targeted by this bill are irked most of all by the issue of taxation, feeling that the bill punishes them for allegedly not paying their dues even though they are tax compliant.

It’s true that tax evasion is a valid concern, but just who is doing the evading and what its scope is for vacation rentals in Hawaii is debatable. In 2005 a Hawaiian Tourism Agency study concluded that an estimated 9,000 vacation rental units were non-compliant with tax laws. This figure was challenged at the time and the agency has since stated that, “The results of that investigation, where several thousand undocumented accommodations were identified, were presented to the Department of Taxation, the Department of Business, Economic Development and Tourism, and the counties to take administrative and enforcement actions necessary to ensure compliance with state laws and county ordinances.”

In other words, local agencies had the information to crack-down on whatever non-compliance existed at the time.

The Department of Taxation testimony to the House Committee on Finance on April 3, 2007, opposing bill SB 750 SD 3 HD 1 related to Transient Accommodations Tax, also addressed the HTA 2005 study. Their testimony stated, in part:

INCREASED SCRUTINY MAY DRIVE TAXPAYERS UNDERGROUND-The Department points out that after its last audit project with HTA, the Department concluded that, in general, those that rent transient accommodations are tax compliant. The Department fears that any increased scrutiny could potentially backfire and drive otherwise tax compliance individuals ‘underground.’ Taxpayers that are forced ‘underground’ can have a direct impact on collections.

Non-resident homeowners that would be most hurt by HB 2078 are irate that they would have to take steps to prove the legitimacy of their rentals when no data has been presented to confirm that there is even a tax enforcement problem with transient accommodations.

Most agree that having an emergency contact number should be mandatory for guests and homeowners, that it is in their mutual interest. What many do not agree about is the necessity of having this person take a center role in the advertisement of the rental itself. This and showing their tax ID number leaves many shaking their heads.

What do you think of HB 2078?

You can submit testimony here. You will need to enter “HB 2078″ into the search box and make sure your testimony is submitted before the 24 hour cut-off deadline at 7:15 pm EDT on March 21, 2012.

Please duplicate your testimony and share your thoughts with us in the comments section below.

Comments on: "“Show Me Your Tax ID Number,” as required by HB 2078" (3)

  1. If you are going to write an article you should make sure that you have the facts correct. The HB2978 is an education bill. The bill you are talking about regarding Hawaii’s rental accomodations is HB2078 HD2 and also SB1706 SD1.

    • Good catch, Gail! I’d mistakenly published the article with the incorrect bill number. We’ve since corrected the error. Thank you very much.

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