Feb 10, 2012 11:02 AM
I just wanted to make you aware of some important legislation that will affect all Hawaii VRBO owners.…...Basically Your Owner Rights are About to be Taken Away........Currently pending before Hawaii Legislature are two Bills, SB 2089, and HB 1707, that will REQUIRE YOU TO GIVE UP MANAGING YOUR OWN PROPERTY and have a realtor collect your income rather than you. I think our attention and action is urgently needed to voice opposition to the passage of these Bills.
Here is a little more detail and links:
This is for all "non-resident" owners regardless as to whether they have followed the law and paid taxes. The new laws REQUIRE you to only rent through a realtor/property manager and the realtor MUST collect ALL your rental money (you do not directly receive the money from rental of your property). You may not know that property managers in Hawaii charge up to 40% of your gross revenues. This would be a huge financial loss to property owners. There is no provision in the law to allow "non-resident" owners who have already been operating legally (getting a Hawaii business license, tax I.D. number and paying all collected taxes) to be exempt from complying with this new law.
Here are the links so you can read the bills for yourself. Please also read the "testimony" which is primarily property management companies who want it passed (obviously with a bit of conflict-of-interest since they will monetarily benefit from its passage). Both of the Bills were introduced into the House and Senate in January. It seems that the real estate community knew about this Bill given the volume of "testimony" from them, but almost no response in opposition from any property owners. I think property owners do not know about the Bills and we are trying to at least let other VRBO owners who self manage be aware of this threat to your continued ability to operate your own rental and receipt of monies.
Senate Bill 2089
House Bill 1707
If you want to voice your concerns to the next Committee to vote on this it will be the (CPN) Senate Committee on Commerce and Consumer Protection; (TOU) House Committee on Tourism has already passed it but they should still hear from owners; (CPC) House Committee on Consumer Protection and Commerce; (JUD) House Committee on Judiciary; (FIN) House Committee on Finance
Committees with individuals email addresses
All representatives in the House and their email addresses
All reps in Senate and their email addresses
The House representative who introduced the Bill is Cynthia Evans. The Senate representative who introduced that bill is Josh Green.
If I can answer any other questions you have, let me know. We believe there are many other ways for the state of Hawaii to be sure they collect tax revenue than through this extreme measure that benefits Property Management Companies at the expense of individuals who own and rent their own units.
At all levels of government, whether it be state or federal, the consequence for not paying taxes when due is to impose interest/penalties on past due amounts. If it is willful fraud, the agency will then pursue criminal action. At no level does any other government agency require that your salary/income be received by a third party. We all are bound by law to pay taxes that we owe and if we do not comply those same laws impose penalties (interest, fines, or jail for fraud). Hawaii already has laws that require any person selling accommodations to collect Transient Accommodations tax (TAT) and GE tax. If there is a non-compliance of that law, the "crime" is for not paying one's taxes.
HOWEVER, these new proposed laws now make the "crime" not hiring a realtor/property manager and the penalty for non-compliance is $1,000 a day!!! If the state's motive is to collect taxes, there are already laws to do that and enforcement is what is needed, not a law that property owners must hire a realtor manager and then relinquish all rights to manage their own property.
It's hard to believe two bills like this are actually close to becoming law!