HAWAII TRANSIENT ACCOMMODATIONS TAX UPDATE
HAWAII TRANSIENT ACCOMMODATIONS TAX FULL

The state has different mechanisms to check also on rental income. So make sure you are accurate with the taxes that are due. It means if you ever get audited, the state may require you to open your books going back 3, 5, 7, 10 years, 15 years, whatever it is. There is no statue of limitation with general Excise Tax or Transient Accommodation Tax. So it’s important to be timely on those payments and it’s important to be accurate on the calculation of those payments. If these taxes are not received by the 20th, there are hefty penalties and there are late fees and interest that accrues on it. Normally they are due on the 20th of the following month after the collection period. Those taxes are due either quarterly or monthly depending on how much rental income is generated. – (Rates for the neighbor islands may differ!) All rental revenue from rental terms shorter than 180 days(plus cleaning fees collected) is subject to an additional 3% OTAT.

HAWAII TRANSIENT ACCOMMODATIONS TAX UPDATE

It’s on the gross rent received, 4.5% General Excise Tax.Ģ.) If you rent your property on a shorter-term basis, that is defined as 180 days or less per tenant, then you’re obligated to pay an additional 10.25% (effective, previously was 9.25%) Transient Accommodation Tax (TAT)ģ) UPDATE effective : OTAT – Oahu Transient Accommodation Tax (Oahu). This is on the gross rent received, not on the rent after expenses, minus expenses. Regardless if you rent your property short term or long term, we need to talk about tax obligations that come along with collecting rental income in Hawaii.ġ.) On all gross rents received you have to pay 4.5% General Excise Tax (GET). We talked about house rule rental term restrictions which sometimes is 60 days or 90 days minimum per tenant. In a different segment we talked about vacation renting your property and we talked about residential zoning, rental term restrictions which normally is 30 days minimum per tenant. This is George Krischke with Honolulu HI 5 (company now called Hawaii Living). The council will take up the tax bill at a public hearing next month.Aloha. For us to have the same system and pay two different sets of employees to do the same thing, I don’t see it as being anywhere near efficient.” “They (the state) assess (general excise) tax and they cut us a check for it. “It seems like such a waste of resources,” Kaneshiro said. Matsuyama said the county is working with neighbor counties as well as the state’s Department of Taxation to figure out implementation.Ĭounty Council Chair Arryl Kaneshiro suggested he’d like to see the state do the assessment and then forward the county’s share. When the state cut off the county’s TAT cut in fiscal year 2020 due to the pandemic, the administration and council opted to utilize the reserve fund to balance the budgets of FY21 and FY22. “It’s not a new stream of funding,” Matsuyama said. The money the county would be collecting would essentially be to cover ongoing expenses.

HAWAII TRANSIENT ACCOMMODATIONS TAX FULL

“We are not looking at full $17 to $19 million because we only have three-quarters (of the year left), assuming pre-COVID levels would continue based off the calculation of TAT,” County Managing Director Michael Dahilig said. In a previously reported projection, per every 1% TAT increase, the county would see about $6 million in revenue. The proposed bill also applies to visitor brokers, travel agencies and tour packagers who arrange transient accommodations at noncommissioned contracted rates, the bill states. This proposed bill establishes a 3% TAT on all gross rentals, gross-rental proceeds and fair-market rental value considered taxable to be collected each month. 1.Ĭounty Finance Department Director Reiko Matsuyama projected that to break even, the county would need to charge between 2.3% and 2.4%.

Officials suggested that the administration would like to see the tax up and running by Oct. So this proposed 3% tax administered by the county would be on top of that. The state typically pulls in about $103 million from its 10.25% TAT, a portion of which was previously distributed to the counties. State House Bill 862, now Act 1 of the 2021 special session, eliminated the distribution of TAT revenues to the counties, and allows counties at their discretion to create their own visitor-accommodation tax of up to 3%. 2829, which would allow the administration to establish this tax, passed at its first hearing last Wednesday, with councilmembers in favor of finding ways to fill the roughly $15 million per year the state was expected to give the county in TAT revenues.

LIHU‘E - The Kaua‘i County Council is putting support behind the administration’s request to implement a 3% county transient accommodations tax.īill No.

Hawaii transient accommodations tax