2017-11-28 Letter to Senator Donovan Dela Cruz re Transient Accommodations

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Senator Donovan Dela Cruz November 28, 2017 Page 2 • Definition of"transient"—the current thought is to apply the regulation using the same definition as HRS 237D-1, i.e., paying guests who stay less than 180 days; • Permitted zoning districts—the bill would define where TVRs would be permitted, and grandfather legitimate existing TVRs in unpermitted zoning districts; • Registration—Depending whether the proposed amendments to HRS 237D can adequately identify all properties operated by each operator, the County's bill may require registration of all TVRs, whether in a permitted district or grandfathered, to identify these uses for property tax purposes. This County does not presently tax transient residential accommodations separately. In a separate bill from the land use regulation of TVRs, the Council may consider creating a separate real property tax class for transient residential accommodations. Response to Questions Presented The following are responses to the questions presented in your letter: • Estimate of potential revenue generated in our County through vacation rentals. At this time, this County does not have a separate real property tax class for vacation rentals. It is uncertain whether the proposed bill to create a new real property tax class will include bed & breakfasts, hosted rentals, and TVRs . . . or just TVRs. Since we currently do not tax any of these accommodations separately, we do not have an accurate inventory of any of these types of accommodations to estimate potential revenue. • List of additional resources or assistance by the County that is needed for collection and/or enforcement. Assistance from the State needed for county enforcement and property tax collection include: o Operator's certification of compliance with county laws and regulations; o For purposes of land use enforcement and real property tax administration, disclosure to the county of transient accommodations broker's list of all addresses of properties advertised in the respective county; o Percentage of GET and TAT based on revenues generated to cover administrative costs for TVR regulation. • Aspects of the bills supported by the County. The County supports the following aspects of the bills: o Requiring transient accommodations brokers to report, collect, and pay taxes on behalf of all of its operators and plan managers in the State (SB 1471, SB 704, HB 1850); o Requiring the transient accommodations brokers to include a cover sheet for periodic tax returns listing the operator's name, registration number, and addresses of the transient accommodations rented (SB 1471); o Authorizing the director to disclose the cover sheet or tax returns to a designated county official to ensure compliance with local tax and land use ordinances (SB 1471, SB 704); County of Hawat i is an Equal Opportunity Provider and Employer