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Just sent one and then read this on Facebook: http://www.aclupa.org/pressroom/statesenatepassageofvoteri.htm
related to the ACLU's stance on the voter ID bill in Pennslyvania. I cite it because I'm not sure if the Senate in Pennslyvania don't listen to them, not sure why we would expect the reps in Hawaii to...But I'll try to be more hopeful!
but it has nothing to do with TAT
And how do they know how many people we hire that fall into that category -
so that leads to a whole other set of compliance issues.
This is like Alice going down the Rabbit hole. Welcome to the Mad hatter
From the local paper: http://www.staradvertiser.com/
By DERRICK DEPLEDGE AND SARAH ZOELLICK
I sent this letter off to the ACLU this morning and would suggest that you do the same. This legislation goes way beyond mere inconvenience and imposes on our civil rights. Please let your voice be heard. firstname.lastname@example.org
To whom it may concern:
As a non-resident property owner in the state of Hawaii, I think I can safely say that we as non-resident owners are appalled by the discrimination set forth in Hawaii’s proposed SB 2089 Legislation. I hope you will review this Bill and assist us in our opposition to this blatant disregard to our Civil Rights.
The issue: State Discrimination Against Non-Residents
What limitations does the Privileges and Immunities Clause of Article IV place on the ability of a state to discriminate against non-residents of the state?
As the Supreme Court sees it, the Privileges and Immunities Clause of Article IV and the Commerce Clause of Article I serve the common goal of unifying the country economically. The primary purpose of the clause is to prevent states from placing unreasonable burdens on non-residents "in their pursuit of common callings within the state." The concern of the framers was that discrimination against non-residents by one state would lead to discrimination of the same sort by other states, to the detriment of the nation as a whole.
Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State....
The Citizens of each State shall be entitled to all Privileges and Immunities of Citizens in the several States....
The Constitution prohibits discrimination against non-residents through the Equal Protection, Privileges and Immunities and Commerce Clauses…. The statute is unconstitutional if it is not necessary to further a compelling state interest. Under the Commerce Clause, the inquiry is whether the law regulates evenhandedly with only incidental effects on interstate commerce, which means different treatment of in-state and out-of-state economic interests.
Our rights have been totally disregarded in order to solve a taxation issue that should be addressed as just that and not expressed as a management issue of non-resident owners.
Thank you so much for your attention and I hope you feel compelled to assist in this matter.
If you would like to send letters to the House of Rep. as they are next to address SB 2089 here is an email address that will send to all of them. email@example.com
Thank you so much for contacting the ACLU. Your letter is awesome. The more we reach out to other experts in the law and commerce the more we will illuminate the injustice of what the Hawaii Legislature is proposing. I was wondering in addition to us all writing to the House of Representatives in Hawaii, should we also individually write to our home state Congress persons in Washington. Since the violations are actually Federal law we could ask our representatives in Washington to protect our rights. Even if only one got interested - it would be a help. What do you think?
Does anyone have a link to the two studies from 2005 and 2007 which demonstrated that even among the unlicensed rentals, the taxes are being paid?
I hope to use this to counter the unsubstantiated argument by the supporters that revenue is being lost by referring to an actual study that disputes their claim.
Anyone can throw out a figure if no proof is required.
Sherron Bull posted some info on 2007 on the Facebook Group
I would like to read the post you are referring to on Facebook. When I click the link it doesn't give any information. I think it might be because the content is in the closed Facebook group. Is it possible to copy and paste the information here.
Well, for what it's worth, here's my contribution. It's been emailed, or faxed as required, to all Hawaii representatives and senators, and the list of other individuals on Pg 2 whose expertise may help contribute to informed deliberation. A different approach than some on this forum, but for obvious reasons, as you'll see.
Please feel free to leverage as required.
March 8th, 2012
Members of the House and Senate
Hawaii State Legislature
415 South Beretania Street
Honolulu, HI 96813
Dear Members of the House and Senate of the Hawaii State Legislature:
My name is Adam Leamy. I am a Canadian citizen, residing in Victoria, British Columbia, Canada. I am writing in respect of the North American Free Trade Agreement (NAFTA) and Senate Bill 2089 SD1 (and recent Hawaii State Legislature bills similar to it).
My interest in this bill, and recent bills like it, stems from my ownership of two properties on Maui; units 203 (purchased in 2008) and 208 (purchased in 2011) in Hale Kai O’ Kihei. This is a 59-unit building located at 1310 Uluniu Road in Kihei, 96753, and is supported by a full-time, live-in Resident Manager. Both our apartments are cared for and attended to by Tips Maui, Inc., owned and operated by Mr. Ed Galvez, of Maui, Hawaii. My Hawaii Tax Identification Number is W87097056-01. My Internal Revenue Service Tax Identification Number is 98-0607258.
I am not alone in investing in United States real estate in order to establish and conduct enterprise there. I expect that there are many thousands of Canadians who have made and operate similar investments in Hawaii, Florida, California, the New England states and all other states and regions of the Unites States, providing legal guest accommodation in all manner of housing types and locations. In the same vein, there are likely many thousands of Americans who have invested in vacation and second properties in Canada, and through responsible management decisions, make them available to tourists visiting those locations.
It would seem to me that if individual citizens of Canada and the United States made such investments, and then found that state or provincial action applied greater operational standards and additional costs to them than to ‘resident’ investors engaged in the same enterprise, NAFTA would be discredited within both countries at its basic level: individual citizens who sought to pursue cross-border investment and enterprise through its provisions, only to see themselves the focus of targeted operational requirements and costs after the investments had been made. It also seems likely that such individuals, encouraged by their governments to embrace NAFTA and seek opportunities under its provisions, would quickly turn to these same governments for action and resources to offset the additional costs imposed on them because of such governments’ encouragement to embrace NAFTA, and the failure of the cross-border state or province to honour its provisions and protections.
It also seems to me that in these uncertain economic times, it is better to head off such problems so that people can focus their energies on making investments and creating and operating enterprise. This does not seem to be a good time for any of us to be distracted from the fundamentals our business investments and our operation of them.
And that is why in writing to you I am also writing to others, by email or by fax as appropriate, to seek their efforts in providing helpful input to Hawaii State Legislature on bill SB2089 SD1. It is my hope that they may be able to assist in ensuring SB2089 SD1 and bills similar to it achieve State of Hawaii objectives while honouring and upholding the provisions and promise of NAFTA, as committed to by the United States, Mexico, and Canada. These individuals are:
I start by saying that I am a responsible and documented part of the Hawaii Tourism Industry. I respect United States sovereignty over its affairs, and that of the individual States over theirs. So I do not consider it my place to offer a stance on this bill. I do hope, however, that my input — to the extent it might reflect the principles that underpin your deliberations and debates — might be considered in your actions regarding your responsibilities related to this and similar pieces of legislation.
My investment in the United States, in the State of Hawaii was shaped in part by the provisions and opportunities inherent in the “North American Free Trade Agreement” (NAFTA), which began on January 1, 1994. This agreement removes most barriers to trade and investment among the United States, Canada, and Mexico. My operation of this investment is fully in keeping with the scope and purpose of that Agreement, the requirements of all appropriate local, State, and United States tax laws, and is in accordance and compliance with the “United States — Canada Income Tax Convention,” a tax treaty between our two countries signed at Washington, D.C. on September 26,1980, and which entered into force on August 16, 1984.
I make each of my properties available to vacationers to Hawaii through Vacation Rentals By Owner, where they are listed under www.vrbo.com/241190 and www.vrbo.com/357582. I make all my own bookings. My bookkeeper provides invoice and supplementary guest-contact support in this regard, and ensures collection and remittance of the Hawaii Transient Accommodation Tax and the General Excise Tax. My accountant prepares my Canadian tax return for the Canada Revenue Agency. And an IRS-qualified and recognized accountant makes all required filings to the Internal Revenue Service per its requirements and the “United States — Canada Income Tax Convention,” i.e., IRS form 1042 and Hawaii State Tax Form N-30. These are not inexpensive services, but in my view, they are what’s required to operate responsibly and successfully.
On the Hawaii State Legislature webpage, SB2089 SD1 is identified as follows:
Measure Title: RELATING TO TRANSIENT ACCOMMODATIONS.
Report Title: Nonresident Owners; Transient Accommodations
Description: Requires any nonresident owner who operates a transient accommodation located in the nonresident owner's private residence to employ a real estate broker or salesperson. Requires any nonresident owner who operates a transient accommodation located in the nonresident owner's private residence in a condominium hotel to employ a condominium hotel operator. Requires relevant information about owners of the transient accommodation to be provided to the department of taxation for enforcement purposes. Requires the counties to provide the department of taxation with relevant owner information about every transient accommodation permitted by the respective counties annually. Establishes fines for noncompliance. Provides an exemption from the mandatory employment of a licensed real estate broker or salesperson or condominium hotel operator in certain circumstances. (SD1)
On this same Hawaii Start Legislature webpage, “Nonresident Owner” is defined as follows:
[A]n owner of a rental property in the State who resides on a different island from the property or out of state and who rents or leases the property to a tenant.
This and recent similar bills progressing through the Legislature make and apply to “nonresidents” management and operation standards and requirements from which “residents” are exempted. And it is this distinction that forms the basis of my uncertainty about SB2089 SD1: Are not Canadians who are investors in Hawaii, and who have investments there to receive treatment no less favourable than the most favourable treatment accorded, in like circumstances, by the State to resident Hawaii investors and to investments of resident Hawaii investors?
I referenced, earlier, North American Free Trade Agreement. Signed by U.S. President George H.W. Bush, Mexican President Carlos Salinas, and Canadian Prime Minister Brian Mulroney, NAFTA came into effect on January 1, 1994. Since that time, NAFTA has, for all three countries, generated economic growth and increasing standards of living. In strengthening the rules and procedures governing trade and investment throughout the continent, NAFTA has opened doors for our countries. As important, for each of us individuals, it has allowed us to make investments, create enterprise, and drive prosperity.
I am not a legislator, a trade expert, or a NAFTA expert. Nor am I a government official possessed of, or with in-house access to, this level of expertise. I own a small business, and with my profits and personal savings, I have invested in these two properties in Hawaii. So when, in trying to come to terms with SB2089 SD1 and similar recent Hawaii State Legislature bills that hold provisions for “nonresidents” that do not apply to “residents,” I turned to NAFTA, Chapter 11 (noting that “Party” means the United States, Mexico, and Canada):
NAFTA Article 1102: National Treatment
(a) impose on an investor of another Party a requirement that a minimum level of equity in an enterprise in the territory of the Party be held by its nationals, other than nominal qualifying shares for directors or incorporators of corporations; or
(b) require an investor of another Party, by reason of its nationality, to sell or otherwise dispose of an investment in the territory of the Party.
I recognize that I may well be wrong in considering this NAFTA provision to be applicable to me, and to other Canadian citizens who have made cross-border investments in vacation accommodation properties in the United States, and who are unsure about SB2089 SD1. But on the chance that I am not, and other current or potential Canadian investors find themselves in a similar position and are unsure about this and other Hawaii bills, accurate information on the NAFTA national treatment front might help shape the deliberations and debate by the Hawaii State Legislature. That would be positive, and it is in this spirit that I am contributing.
I am asking, therefore, that all recipients of this letter, including Hawaii State Legislators, use the expertise and resources available to them — which in both cases will be far superior to mine — to undertake to determine that such a legislative standard as proposed by the Hawaii State Legislature in SB2089 SD1 supports and upholds the spirit and intent of NAFTA, and the provisions and protections I have noted from Chapter 11, above.
I do hope that in considering the purpose and intent of this and similar bills — if the purpose and intent are honourable and aimed at ensuring lawful participation by all Hawaii property owners offering transient accommodation in support for the schools, hospitals, services and infrastructure that keep Hawaii running — careful thought is given to all good and hard-working Americans and Canadians who have invested in Hawaii and, through payment of taxes, are contributing to a strong and economically viable Hawaii.
As I said at the outset, I am a Canadian. I am proud to have a documented business that attracts and accommodates visitors to the state, and which supports the Hawaii and United States economies through purchases made there to ensure the amenities and services are in place to make our guests’ stays exceptional. I know that my voice does not factor in Hawaii State Legislature considerations, but I would hope that commitments our two countries have made to each other — and indeed, expectations that we have of each other through trade treaties and tax conventions — do.
I realize NAFTA may seem a long ways away from the intent and purpose of this and similar Hawaii State legislature bills. But in the case of Canada and the United States, this linkage is so very strong, and whether we think about it frequently or not at all, it very much defines the relationship between our two countries, and offers a standard of treatment to which countries around the globe aspire, and in which they seek to participate. And for this reason, too, I think that care must be taken not to weaken this standard of treatment.
The Government of Canada makes some helpful findings of the importance of this relationship on its website http://www.canadainternational.gc.ca/washington. It notes that:
Trade and investment flow both ways, and data showing the importance of the United States to Canada are just as impressive indicators of the power of the trade and investment relationship between our two countries. When advancing these facts, the same Government of Canada webpage notes that these gains underscore the need for making sure that our border remains open to trade. And United States government webpages make the same assertion; government policy on either side of the border that hinders or weakens investment costs jobs in every state and every province — and, I think it is fair to say, given our relationship, hinders confidence in others around the globe who would consider investing in our countries.
The US Department of State website (http://www.state.gov/s/l/c3439.htm) offers additional clarity on the matters raised above, when it advises:
Chapter Eleven of the North American Free Trade Agreement (the "NAFTA") contains provisions designed to protect cross-border investors and facilitate the settlement of investment disputes. For example, each NAFTA Party must accord investors from the other NAFTA Parties national (i.e. non-discriminatory) treatment and may not expropriate investments of those investors except in accordance with international law. Chapter Eleven permits an investor of one NAFTA Party to seek money damages for measures of one of the other NAFTA Parties that allegedly violate those and other provisions of Chapter Eleven.
Hawaii State Legislature bill SB2089 SD1 and others like it appear to be aimed at making sure that all who benefit from Hawaii and the United States contribute as required to keep Hawaii, and the United States running. We have precisely the same obligation where we live here in Victoria, in the Province of British Columbia, located in the country of Canada.
In these difficult economic times, it seems practical for any government to pursue tax scofflaws, law breakers, and free-riders whose choices not to participate in proper documentation, remittance, and compliance hurt us all. But to do so the manner of Hawaii State Legislature bill SB2089 SD1, would appear to contravene the obligations of the State as committed to by the United States in affixing its signature to NAFTA on behalf of the states. And in these difficult times, it seems an unhelpful thing to let stand any policy or legislative initiative which tells current investors that despite the intent, promise, and security of NAFTA, its provisions and protections are meaningless, and their investment in the United States is as risky as, or is perhaps riskier than, an investment in a jurisdiction without a trade agreement.
I would hope that all who read this would provide input to Hawaii State Legislature bill SB2089 SD1 and others like it to ensure they achieve State objectives and achieve the commitments, provisions, and promise of NAFTA. This bill, and others like it that have been written or amended in the past month, would appear to fail the required standard of providing Canadian investors with “treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that state or province to investors, and to investments of investors, of the Party of which it forms a part.”
So if NAFTA shaped these cross-border investments by individuals, or if it governs their treatment in either country, it seems to me that action by a state to impose a different standard of operation on real estate investments by Canadian owners not resident in the state — or by a province on real estate investments by Americans not resident in the province — undermines NAFTA and creates significant tax liabilities for governments in both countries. And this would be a terrible course of action for both our countries. It seems quite possible to me that if one state can advance legislation to change the rules of NAFTA to impose different standards and costs on Canadian investors, legislative creep could see other states do the same, and in time, Canadian provinces undertaking the same course to target Americans who own property in Canada. I think we owe each other better, but I concede that for all manner of government, these are difficult and desperate times. Perhaps SB2089 SD1 correctly signals that the time for trade agreements has passed.
In closing, irrespective of tax treaties and trade agreements that make my ownership of two properties in the United States possible, it always has been and continues to be a privilege that I am able to do so. I work very hard to provide an exceptional guest experience, and I am proud of my success in attracting visitors from around the globe to Hawaii, Maui, and Hale Kai O’ Kihei. And yes, to my two apartments there. And part of the reward in this is knowing that I am making all tax collections and remittances to support the schools, hospitals and infrastructure that are essential to life, community, and opportunity in Kihei, Maui, and Hawaii, and that I value just as highly here, and support through my Canadian tax compliance.
But I would request that if the Legislature were simply aiming to make all owners as responsible as those who are obeying all the tax and other laws, they might reach out to those of us with State of Hawaii Tax Identification Numbers and Internal Revenue Service Tax Identification Numbers so that we could work together to demonstrate progressive ways to enter into compliance and make filings and remittances that are essential to the services and programs and thus the security and prosperity of Hawaii and the United States.
We care, and we would help.
There are thousands of good and willing people amongst those who have the privilege of owning rental properties in Hawaii. I know they would work with the State to assist others to achieve the standard of responsibility. Even given my status as a foreigner, I would be willing to help. There are ways to secure the participation of those who are not in compliance with Hawaii and United States tax requirements without sapping the strength or support of those who are, and importantly — which I fear is the case with SB2089 SD1 — without disregarding the commitments and protections that give credibility, strength, force, and stature to NAFTA.
The benefit of owning a vacation or ‘transient’ accommodation in Hawaii or in any state or province should not be limited to the owner, nor end with the purchase of the property by an owner. As so many law-abiding, tax-collecting, and -remitting owners have proven — be they American, Canadian, or of other nationality — that purchase can be and is the start of the flowing of benefits to all who call the location of the investment home, and choose to visit it, too.
I hope that’s a point upon which we can build and work together, and one that would see us do so while upholding responsibilities, protections, and commitments under NAFTA.
I wish you the best in your deliberations throughout this legislative session. I hope that you will use your expertise and resources, and seek and welcome same from others, to determine that such a legislative standard as proposed by the Hawaii State Legislature in SB2089 SD1 supports and upholds the spirit and intent of NAFTA, and the provisions and protections I have noted from Chapter 11, above.
Outstanding letter. Thanks very much for taking the time write it.
lI hope it is taken more seriously than the opinion from a Hawaiian attorney the bill violates the US Constitution
Wonderful letter - I sure hope the legislators take the time to read it. The bill is just wrong - and violates so many different things! Maybe your angle will make an impact on the legislators. I sure hope so.