State Senate Revives Vacation Rental Regulation

Apr 30, 2019

A 12-12 tie in the State Senate, with one member absent, signaled the end of SB 1292, which would have required short term rental booking platforms to collect taxes on behalf of the state.
Credit danxoneil / Flickr

Update, April 30, 2:05 p.m.: The State Senate revoted on and passed SB 1292 imposing short term rental taxes by a margin of 13-12. The bill, already approved by the House of Representatives, now goes to Gov. David Ige for signature or veto.

Update, April 30, 10 a.m.: An effort is underway at the capitol to revive SB 1292 using a Senate procedure known as a Motion for Reconsideration. A second vote of the full Senate would have to happen on Thursday. 

Orignally posted, April 30, 6 a.m. It appears that state lawmakers will adjourn for the year without reaching an agreement on short term rentals. If that sounds familiar, it’s because the state has tried and failed to enact vacation rental regulation for the past four years

It went the farthest in 2016 when lawmakers agreed to tax short term rentals, but then Gov. David Ige vetoed that measure.

On Friday, the State Senate deadlocked on a similar bill that would have required short term rental platforms like AirBnb and HomeAway to collect state taxes.

After a 12-12 tie, with Ewa beach Republican Kurt Fevella absent, the bill appears dead yet again. On Monday, several lawmakers and advocates indicated that there was a possibility of reviving the bill before the end of the session. It was not immediately clear how that would be possible.

Both supporters and detractors of the short-term rental industry found something to dislike about the proposal.

Philip Minardi, the Policy Communications Director for Expedia Group, which owns the booking platforms HomeAway and VRBO, said his company took issue with a provision of the bill that would have required Expedia and others to detail the total number of units available for rent in each zip code every month.

“We're willing to collaborate on things that help drive enforcement, that help get registration numbers up higher than they currently are, but at the end of the day we just can't infringe upon the personal and private date of our customers.”

Minardi said Expedia had no issue collecting taxes for the state. Opponents of short term rentals found other reasons to dislike the bill, in particular the lack of enforcement provisions.

The community group HI Good Neighbor described the measure giving tacit approval to, what in many cases is an illegal activity. The rules vary by county, but on Oahu the majority of rentals under 30 days do not have a permit from the City and County.

“Neighbors have no ability or recourse when there’s an issue in their community. Who do they complain to? Our position has always been that we need more enforcement before we start opening our communities to tons of vacation rental units,” Tam said.

With action at the state capitol appearing unlikely, attention now turns to the Honolulu City Council, which is considering several proposals to regulate short term rentals.