Judge Allows Hawaii To Subpoena Airbnb For Host Tax Data But With Limits

Nov 6, 2019

Updated: Nov. 7, 6:45 a.m.

A judge on Wednesday ruled Hawaii tax authorities may subpoena Airbnb for records of its hosts as part of an investigation into whether operators of vacation rentals have been paying their taxes.

First Circuit Court Judge Bert Ayabe approved the subpoena after a brief hearing.

Airbnb and the state Department of Taxation have already agreed on which records the company will provide in response to the subpoena.

The company said it will hand over records of 1,000 Hawaii hosts who received the most revenue from 2016 through 2018.

The company will also provide data for hosts who had more than $2,000 in annual revenue during those years, but the identities will remain anonymous. The state may then request individual records for these hosts, though it will be able to obtain information on only 500 hosts every two weeks.

If a host files a legal motion challenging the transfer of records, Airbnb won't provide the state with the data until the legal case is resolved.

The state needs the court's permission to serve the subpoena because its investigation targets a group of taxpayers and not specific individuals.

The state said it needs the subpoena because it's unable to obtain the data through other means.

In court filings, the state said many hosts don't generate enough revenue for Airbnb to send the IRS relevant tax forms for them. Another challenge is the relative anonymity hosts are given on the Airbnb website, where rental operators are often identified by a first name. An investigation by tax authorities found 70.4% of Hawaii listings on Airbnb's website in April didn't include tax identification numbers in violation of Hawaii law.

The state first sought to subpoena tax records from Airbnb last year when it asked a judge to order the company to hand over a decade of vacation rental receipts. But First Circuit Court Judge James Ashford denied the motion.

The state filed a new petition in June seeking approval for a revised subpoena. The department and Airbnb began negotiations after the second petition was filed.