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I have two questions about what this law is trying to accomplish...
1. Collect taxes? The law implies that only non residents don't pay taxes. On island residents never cheat. ( this is borderline racist)
2. Protect Guests when problems arise? I thought there were already laws that required an on-island rep to help with problems.
Is the goal here to provide Hawaii residents with a better position vs non island residents? This makes some sense since the property taxes are biased against non- resident owners as well.
Any input here is greatly appreciated.
I am replying to gordohi.
I would love to know the reasons for this law. I have written to ALL the senators and ALL the representatives. One of them responded by saying it was about non-residents not paying their taxes. I, personally, don't believe this. There are already ways to see who pays and who does not. From everything I have read, the majority of non-residents are in compliance with the TA & GE laws. There are always some cheaters, both non-residents and residents. I own two properties on the Big Island since 2004 and have on-island help (but not realtors) who take care of my homes. I pay them a percentage, but not the astronomical perentages of a management company. I do all the bookings myself and they are there to take care of the problems if any should arise. We have a wonderful relationship and have been doing this for 11 years.
I feel that the reason for this bill is all about the realtors wanting to take control. There is no way I am going to give up handling the rents on my homes. Hawii is no telling me that I have to hire a realtor to handle my rents. This is not fair. Do any other states have this law??? This is my job, and I love it. If this law passes, Hawaii will be destroying one of its best assets - the non-resident vacation home owners who LOVE Hawaii, promote tourism, and pay their taxes.
It is a very bad law and should not be passed. The legislators have not thought this one through.
HB1707 has now been referred to the Finance Committee and will be reviewed on Thursday 2/23...get your testimony in and make those calls!
Here is the status: http://www.capitol.hawaii.gov/measure_indiv.aspx?billtype=HB&billnumber=1707
jwe, i logged in here initially under my facebook account which is totally hidden (but it displayed my full name--greaaaat). not sure if that's why it wouldn't accept my request to join. I may re-do facebook under this nom de plume. You are welcome to copy as needed. Anything to help this effort.
I made some calls to representatives this morning (inspired by pualanikapoho) and even had a discussion with one of the aides who pulled up the bill on his computer (he's the one who told me it was now scheduled for Thursday) and he basically seemed to agree that if someone is not paying their taxes, making them use a sales agent or real estate broker is not going to incent them to do so, it's only penalizing those who do. Hopefully he will convince his boss.
Fight! Fight! Fight!
I'm adding my two centavos.
Firstly, I SERIOUSLY doubt that the state stands to collect $35 -$55 million (or whatever the number is) in tax revenue, much to the contrary, I believe the state will loose a sizable chunk of revenue if this bill moves forward. I believe it will drive people underground and find other ways to run their businesses rather than to deal with realtors to collect monies, or as others have mentioned, many will simply leave the state or even foreclose.
Not paying GET and TAT is TAX EVASION, a serious crime and I would venture to say the great majority of homeowners are not willing to take that risk (I know I'm not), specially when the state happily accepts our tax payments knowing full well (and in my view sanctioning) that we are operating (in a large majority) illegally.
To say that out of state residents are detrimental to the local economy is just silly. I adore Hawaii and plan to live here permanently in the future. I own a condo and a home and pay all taxes on both. The condo is managed by a management company because it is rather high volume and my home is managed by me and a good friend that lives on the island. I handle all the bookings for my home because I want complete control over who I rent to. I am very selective about who I rent to. To say we don't have personal contact with our guests is neither here nor there. What personal contact does my management company have with my condo guests besides handing them the keys? I guarantee I know a lot more about the folks that stay in my home than my management co. know about the condo guests.
Since I have purchased my home I have spent thousands and thousands of dollars on improvements that are beneficial for my neighborhood as a whole. My neighbors appreciate the fact that we have upgraded our property and that we have pride of ownership. I have pumped a lot of money into the local economy buying appliances, landscaping, hardscaping, furniture, building products you name it. I hire local residents to build, clean, repair etc.... My guests spend money at local restaurants and businesses. So please don't tell me that I am a detriment to the local economy!
What the state/county needs to do is start issuing permits again so that we can operate legally! We are not given that opportunity at this time.
Regards to all,
H,i I have the testimony of Hawaiian House Committee On Finance from their deliberations regarding Transient Tax from the Bill SB 750 SD 3 HD 1 dated April 2007. ( I have it in PDF but it is a poor quality reprint thus I can't scan and post it)
In this testimony they detail an audit conducted by The HTA of both bed and breakfast and condo vacation rentals and they found a high compliance for people remmitting their GET and TAT. Their recomendation stronly opposed Bill SB 750. They also found that many of the proponents of the Bill were not as concerned with Tax collection as they were with illegal rentals. Several Hawaiian counties were hoping that the TAT Bill would help them feret out illegal rentals. If you read the testimony of some of the County planning departments for HB 1707 they echo the sentiments of those that testified in 2007. This Bill is not really about unpaid taxes!
Thanks to those that have posted phone and fax numbers for Hawaiian Representatives on the Financial Committee.
It is time to phone and fax! E-mails are getting bogged down in the process given the volume that have been sent.
I cant believe Im just hearing about this - pretty major issue!! I keep reading the date for this is the year 3000 - what does mean? Does anyone know if this passes this week when will this take effect?
Although I don't own a VR in Hawaii, I do own one on an island in NC. I do not live in NC (Ohio) but do just fine without the "help" of a local management company. Your opinions I supect are mostly motivated by your need to increase commissions and have a monopoly on the local rental business rather than based on altrustic thoughts of increasing state taxes, and offering a better product to customers. Since when did restricting and regulating a openly competitive business ever benefit the customer. My post is not to open a debate about which is a better way to rent a vacation property ie... Management Co. vs private owner, but to say "let's let the customer decide".
Note: I do just fine without a management company. My booking percentage is higher than company managed properties. My reviews are 95% 5 star and I only have one 4 star and one 3 star rating. Every guest commented on how easy we were to do business with (even the 3&4 star guests). I charge MORE than average and hardly ever offer a discount. I have a high % of returning guests. oH and and yes I pay all my taxes and since I use HotSpot tax services they paid on time and 100% accounted for. Why in god's name would I, or my customers, want anyone to stick their nose in my business and muck thing up. I think as an other I am in the majority and not an exception.
It is very major. The backers of this were pretty foxy to get it this far
without the interested parties being notified.
The date means that no date has been set yet.
Some comments on this site provide a sense for the steps necessary for
passing or not.
There is also information at Facebook Group "Stop HB 1707"
Before all of you "non-residents" get your shorts in a bunch, where were you when they passed Hawaii Revised Statute Chapter 467 which requires all of you to use a licensed agent to manage your property. Are you in compliance now?
THIS IS MY TESTIMONY THAT I SENT TO: http://www.capitol.hawaii.gov/submittestimony.aspx?billtype=HB&billnumber=1707
Have you fully thought through the repercussions of HB 1707 if it becomes law? By forcing me to pay for an on-island management company/realtor to manage my rentals, you are completely destroying me and my business (and many others like me). I completely oppose this law and when you think long and hard about how it may effect Hawaii's economy, I am confident you will realize it is NOT the answer. This law takes away my freedom of choice. And it discriminates between residents and non-residents.
I love Hawaii and have been going there since the early 1970s. I purchased 2 vacation rental homes in 2004 on the east side of the Big Island, and have had them as successful vacation rentals since then. I have lots of satisfied and repeat guests. If I were to depend on one of the East Hawaii vacation rental management companies to keep my homes booked, I would not be nearly as booked as I am by doing it myself. I LOVE what I do, and now you are trying to take it away from me. I paid the state of Hawaii over $10,000 in TA taxes in 2011. My homes are affordably priced (not like the very expensive West Hawaii properties).I employ a wonderful, hardworking Hawaiian couple who take care of my homes as if they were their own. You don't think a management company will do that, do you? And I pay them nicely! A win- win for both of us. I know many mainlanders who have Hawaii homes and do exactly what I do because we LOVE Hawaii. Why are you trying to force us to go through a management company when what we do completely benefits the state of Hawaii and tourism. And we are completely abiding by the current TA & GE laws. If this law goes into effect, the repercussions will be most unfortunate for the state of Hawaii. You will see more foreclosures, more homes for sale in an already depressed real estate market. This law if enacted is taking away my rights as a homeowner to know who is in my home. When I rent my home, I may not physically meet my guest, but by the time I have made the reservation, we have had many emails, phone conversations, etc. Why would I spend 40% of my gross to do what I can do myself and I enjoy doing?? I won't do that and lots of others won't do it either, and so we most likely will be selling or losing our properties. You will find that most property owners who do their own bookings off island (like I do) truly care about their homes and Hawaii and their guests. This is the reason we have chosen not to use a management company. We continually make improvements on our homes (I recenlty added solar panels to one of my homes).. This law if passed will mandate me to trust a management company with my homes, my guests, and my money. I'm sorry, but I trust myself and from what I have seen, this is the only way to go.
HB 1707 is WRONG and not the solution to Hawaii's problems. The non-resident vacation homeowner is one of the state's assets. Who is promoting this insane legislation? It must be the Hawaii realtors ??
If it is about not paying taxes, there are already ways to find out who is not paying taxes. And I would imagine there are about an equal amount of cheaters that are residents as non-residents. Enforce the laws that are already in effect. Don't pass new laws that will ultimately hurt your state, which this bill most certainly will do.
Woodmeister, I don't know that my shorts are in a bunch since I only wear shorts when I'm visiting Hawaii, but yes I am and always have been in compliance wth the requirement to have a licensed on-island agent. Please tell me where in the statute it states that the agent must "manage" my property.
Woodmeister - Thank you for eliquent "shorts in a bunch" comment. The fact is that I am in compliance. (I suspect most are). My condo HOA actually requires it. I have a licensed on island representative. They however do not require that the licensed on-island representative "collect the rent" and "pay the taxes". I do BOTH of those. Since I have not read Hawaii Revised Statute Chapter 467 you can let me know if I am in compliance.