2024-03-27 FAQ Bills 121, 122,& 123 Council Chair Heather Kimball

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Hilo had 27 TAR complaints for 2022 Kona had 38 TAR complaints for 2022 The public works department also receives complaints, but these are not tracked. Unless the complaint has to do with permitting of structures these are referred to the planning department. The department will begin to track these complaints. Additionally, council district offices often receive complaints. If rental is unhosted it is referred to the planning department. Since hosted rentals are currently unregulated those complaints are not referred or tracked. We pay Property Taxes, GET and TAT taxes.Why are there additional fees? Your property taxes pay for all the services and infrastructure provided by the County such as police, fire, solid waste, roads etc. GET is mostly collected by the state but a '/z percent goes to pay for mass transit. State TAT also goes to the state (we don't like that any more than you do), the county TAT goes to offset the costs to our county services and infrastructure from visitors that do not pay property tax. The TAR program is funded through a special fund. The current fee structure does not provide enough revenue for the county to effectively administer the program. Registration and NUC fees will be exclusively used for program administration and enforcement. How will property taxes be affected for hosted rentals? The proposed legislation does not impact property taxes from the standpoint that the Real Property Tax Code (Chapter 19) already addresses it. Under current property tax law, properties that are operated as TARs are not eligible for the homeowner's tax rate and the homeowner's exemption is applied proportionally. For example, the new homeowner's exemption starting in 2023 is$150,000. If you use half of your property as a TAR you will get a $75,000 exemption instead of the full amount. While this language is in the proposed bill, it was only repeated there so that people would be fully aware of the tax implications of operating a TAR. Bill 121 does propose a tax amnesty program for residents that were not aware of the impacts that renting short term has on their property tax rates. This will allow people to opt out of TAR operations without back taxes or penalties. How does this change affect properties in agricultural zones? The proposed bill allows for TARs on properties that are the primary residence of the owner, regardless of zoning. It also grandfathers in operator hosted TARs and existing NUCs will be honored. While the proposed bill does prohibit the use of "additional farm dwellings" as TARs, it should be noted that this is already prohibited by state law. When a permit to develop an