HomeMy WebLinkAboutCOM 0086.004 2020-2022 PF
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From: Cynthia Martisko
Seat: Monday, February 01, 2021 11:04 AM
To: Council Testimony
Subject: Bill 18 Testimony
We are writing in regard to Bill 18, the proposed increase in taxes on $2 million dollar homes that have no exemption.
While not directly opposed to the bill,we are not necessarily for the bill.The reason is that this bill is to address a budget shortfall,
that could be remedied by enforcing taxes and laws that are already in place. Specifically,Transient Accomodation Tax(TAT) and
General Excise (GE) on many homes. Our concern is that the vacation rental use of many homes by out of state investors has been
neither regulated nor enforced. By not regulating or enforcing,the county is loosing a huge amount of tax revenue,while out of state
investors are making tax free money, at the expense of local homeowners and hotels.
For example, our next door neighbor has his unoccupied house for sale at$1,950,000. He has never had a permit to operate, or a G E
or TAT number. He has rented the house for the past four years at up to$700/night,while charging for TAT and GE and pocketing
the taxes collected. His revenue for these past four years is probably in excess of$200,000!This is a loss for Hawaii County and the
State of Hawaii of over$29,000! His illegal operation is one of thousands in Hawaii that are being used as a cash cow for out of state
investors. In addition, many of these homes are not permitted, are unsafe, and underinsured, putting our tourists/renters at risk
without their knowledge.
We would propose that the County invest in an enforcement agency/person whose salary/benefit package would most certainly be
covered by the excess taxes and permitting fees that would be collected by a competent employee.
Some of the enforcement measures could be as simple as making a list of all licensed vacation rentals in the county and publishing a
simple to find this list for tourists/renters to check before renting. Also encouraging tourists to make sure that their vacation rental
is permitted and licensed protects not only the tourists, but the state and county as well. Finding these rentals is as easy as cross
checking the vacation rental sites to existing permits, licenses and GE and TAT numbers.
The proposed tax sounds "nice", encouraging wealthy homeowners to invest in Hawaii's homeless, but is simply a band aid to a
larger issue. Many homeowners are claiming exemptions,then turning around and illegally renting their properties to tourists, again
the county looses more money on property tax exemptions.The more illegal vacation rentals that are allowed to continue only
decreases the amount of housing, including affordable housing, available to the residents of Hawaii,thus increasing rent prices and
again, punishing the residents.
This has been an issue with the State and County of Hawaii for many years, and we would appreciate if the issue would finally be
addressed in some way.
Dr. Les and Cindy Martisko
Papaikou
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1Ref. Date FEB 2021