Yep, sure do, but I'll have to repost to present why. ( got stuff on the grill right now)

David

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Great, as I had hoped to convey, it was well written, just go after the issues, not resident vs non resident.

David

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Please visit vacation.ninolehawaii.com

OK, back, (dinner was great btw)

So let me explain why I do.

In truth, we really do NOT know the true purpose either of these measures or the people pushing them. I think this is evident by the fact there is no supporting evidence of what has been offered to date.

That said, I (IMHO) do believe this is being pushed by at least a small segment of the licensed PM community, the selected testimony backs this up. It is not a great stretch of the imagination to say that many licensed professionals do not like non licensed people being able to legally do what they, the licensed ones, can charge for. Just as an example, FSBO real estate. I know my last RE sale, I employed a flat rate broker as I was convinced I'd not get true value using a traditional listing agent. Of course, I had no reservations about paying the % to the agent that brought the buyer if I failed to secure my own. I heard my share of displeasure voiced by the full service types. Felt the same way when I was licensed as well. Again, my own opinion is that in the long run, a segment of the PM community wishes to control all vacation rentals, be they owned by non residents or non residents. The trick is how to achieve. Pretty obvious that going after the final objective directly would be difficult at best, most likely impossible. The best approach is how things get done here. Let me use a real example to illustrate. For sake of staying on topic and not starting a side controversy, I will not identify the actual issue, just lay out the process.

There is a major issue here in Hawaii that has been a hot topic, with very vocal supporters both pro & con for over 10 years. So controversial that the "pros" adopted a prolonged strategy. In the early days, they were successful in getting legislation passed favorable to their cause, but seemingly palatable enough that the "cons" couldn't prevent. Since that passage, they have steadily worked toward the true goal. I think it was 2 sessions ago, that it looked like the next step legislation was dead, only to somehow be resurrected the final week of the legislative session. While it didn't pass, it did serve useful function and gave focus for the next election cycle. The next year, with more favorable members, the legislation, which was also favored by the Governor, passed very early in the session and is now state law. a fair number of people thought this would be the end, but remember, this law is not what the "pros" truly want, just a step in that direction. When asked this year whether the next step legislature would be introduced, the "pros" said likely not, but they would be working the issue for introduction next year.  So, in their mind, it's only a matter of time.

So, back to our current issue. Let's say that it gets passed in some form, mainly that licensed PM's handle the GE/TAT for off island owners. While we would likely never know the true success of such a measure, the perception would be that it was successful. At some future point, someone, be it the original proponents or someone new will propose extending that to all vacation rentals to include resident owned. After all, if 40% of Hawaii VR is resident owned and 30% of those are cheating the system, that is a big loss of tax revenue. As we know resident vacation owners are well heeled and can well afford to pay their fair share so your keiki can get a free lunch at preschool. (OK, I made all this up, kinda like in the present bill). Now the vr community has been fragmented and human nature being what it is, residents will likely not get any non resident support. Out of "fairness" and the promise of increased revenue the expanded measures become law.

So, while resident owners may not be the current target, they are a future target. It is partially this reason that residents are aligned with you now.

Anybody who can prove me wrong, I'll gladly review your evidence.

David

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Copied from the RBOAA letter that was requested to be sent to Senators:

"If the Legislature is inclined to pass this Bill, we request that the resident owners also be required to comply as there does not seem to be an inherent justification for only burdening nonresident owners with all of the requirements in this Bill. "

Thanks for throwing us under the bus for trying to be helpful. :(

David

Here is the letter I have sent to all Senators:

We need to stop fighting amongst ourselves.

Interstate trade laws prohibit treating out of state businesses different from in-state businesses.  We can really pounce on this bill with these well-tested laws.

There's no way the representatives would pass a bill that effected their constituents like this.  Out of state folks can't vote, so the representatives will more readily justify sticking it to them, like they never would voters.

The strategy isn't to make sure we're all screwed equally... nobody wants that.  We're betting that they would never do this to their constituents, which I feel is a very safe bet.

I agree with blackburied.  In looking over the letter of the attorneys in Hawaii that Angie Larson contacted, they say the Bill is discriminatory. 

Sadly, I don't think the Committee members who last heard and passed this Bill made any changes because of the 700 of us asking for it to be deferred.  As well reasoned as any of our letters were, they continue to plow full steam ahead on this issue.  I would have loved if they had allowed us law abiding, tax paying nonresident owners to continue in our businesses in the lawful way we have been.   They easily could have said that any operator of transient accommodations that is found to be non-compliant, must pay back due taxes and as a year of probation be required to use the services of a licensed accountant in the state of Hawaii.  If the goal is tax compliance why wouldn't someone whose education is in accounting and taxes be given the task rather than a "realtor/salesperson". 

The Committee seems to have made the provision for the "clearance" because of the State of Hawaii Attorney General saying in its testimony in referring to SB2089 paragraph 4, line 7,  "but it does impose burdens that are not imposed on resident owners."   So the law firm and the State's Attorney General are saying it is likely not legal because it discriminates between nonresident and resident.  It is a legal argument for setting the bill aside - not a plea to have resident owners join us "under the bus" as you say.  Not at all.  

I take exception to the entire scope of the Bill.  In the United States our tax laws are based on voluntary compliance.  The Federal government (IRS) receives our federal tax return from us where we declare to them

what our income is (voluntary compliance).  Each State government works in the same way.  As a corporation, the system is identical.  Each company prepares its own declaration (tax return) and sends it to the various governments.   Now, if any of these taxing governments deems we have not filed, paid, or whatever; their recourse is audit.  If we have not done what we were required to do (meaning wrongdoing on our part) the violation we committed is --- not paying taxes and are then subject to the consequences of that specific violation.  The current way all (resident and nonresident) operators of transient accommodations disclosed their tax due, was by filing the appropriate tax filing and (again voluntary compliance) declaring to Hawaii how much we are paying in GE and TA taxes.  Very consistent with all other systems of tax compliance.

SB2089 is a completely different basis than any other type of tax compliance.  It seeks to require nonresident owners to forego the control of the operation of their business and to be forced to use a property manager/salesperson all in the name of "tax compliance."  This is a method of "tax compliance" not used by our federal or state governments towards any individual, corporation, or privately held company -- ONLY towards nonresident owners who operate transient accommodations.  This is an abrupt departure from the foundational premise of tax compliance in this country.

The attorneys asserted the discrimination issue and it would appear the Attorney General agreed with them in making their "suggestions" to the Committee.    I also agree with blackburied that the State is not likely to  include its own residents on this issue and hopefully the Senators will set this Bill aside and work out other remedies that are not so divisive.