Hawaii accommodation tax

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Hawaii accommodation tax

Is Airbnb collecting Hawaii state accommodation tax yet?

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Stephanie
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Community Manager
London, United Kingdom

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I’ve looked everywhere online trying to find the link to apply for a Hawaii tax ID in order to pay the TAT and GET tax. None of the links I find bring me to the application to apply for a tax ID. The link you’ve provided above no longer works because I believe there have transient tax law changes. I don’t live in HI, but have purchased a vacation rental condo and need the ID to pay the taxes. 

Jackie in Woodland -

Try this (the instructions follow the form): 

http://files.hawaii.gov/tax/forms/2017/bb1_f_packet.pdf

Good question... did you get any feedback?

I just started with AirBnb and want to be sure taxes are paid to state.

 

Reporting the Gross Excise Tax (GET) and the Transient Accomodations Tax (TAT) is best explained by the State of Hawaii Department of Taxation publication "An Introcuction to the Transient Accommodations Tax" revised April 2016.  The pamphlet is authored by the Governor and by the Director of Taxation.  It is direct, brief, and clearly written.

 

Their reasoning may beclear but following the reporting trail of logic becomes a little slipprey. 

Keep in mind the definitions of "gross rental income" on P.1, and the use of "Visibly passed on" taxes on pp. 2,3. This will allow you  to minimize taxes for which you are liable.  Reporting methods and qualifying requirements are explained.

 

I have just completed filings for CY 2016 and am waiting to see if the Tax Department will distinguish an expected difference between the 1099 reported by Airbnb and the Gross Income reported as visibly passed on under my returns.  Let's see what then State Tax Collector does to me.

 

 

Aloha Dean,

 

Please keep us posted on how your 2016 filings played out.

 

 

Hi Dean,

 

Governor Ige's "An Introduction to the Transient Accommodations Tax" revised July 2017

states that "Your gross rental income is the amount you receive in cash, goods, or services for renting a transient accommodation without any deductions for costs." Presumably, Airbnb's 3% cut could be interpreted as a cost.

 

Why, then, did you declare with Airbnb's payout as gross rental income? Is it because Airbnb, rather than the host, receives the payment from the customer first? Would this technicality supercede the 3% cost because we never touched the original amount billed to our customer? 

 

I would deeply appreciate a clarification. Thank you!

Misstated. I believe it is proper to declare the Airbnb calculated daily rate before deduction of their 3% fee as gross income. 

Aloha Linda, Yes, I agree. I have been in contact with the Hawaii State Tax office about this..I have complained that they are charging  the Transient Accomodation tax on airbnb fees.. One of the State of HI Dept of Taxation  web sites, tax facts No. 96-2 states " the TAT tax like the GE tax is a tax on Gross income. However, the TAT tax is imposed only on gross RENTAL income derived from the renting of transient accommodation in Hawaii."  The airbnb records is including their fees (advertising fees) in with my gross income  so the state is charging me the transient accomodation tax on not only the amount I make on the rental but also on the airbnb fees.The past six months that was TAT tax on $400. dollars (airbnb fees) that I should not have had to pay.. I have contacted the state tax resolution center but got a typical response. I guess I will contact airbnb about this as I am getting nowhere with the state tax people.

Does Airbnb actually send a 1099 to Hosts, or just a summary of fees received.  I didn't receive a 1099, and nothing was filed with the Feds.

I have one apartment for transient rental.  Airbnb sends a 1099 only for much larger volume landlords but not to me.  They told me so.

 

Now, for the determination of Hawaii State Gross Income.  I compute TAT tax only on the amount that I receive from Airbnb and I pay GET on what's left over after TAT.  No kickbacks from Tax Collector.  Not yet, anyway.

 

See Gov Ige's message on the TAT.

 

dean

By the way, I also use the "Visible Disclosure" notice to incoming tenants:

 

We look forward to your arrival and accommodation from 20 - 27 July. Airbnb will send me payment for in settlement of your visit. The payment includes taxes I will then pay to the Tax Collector.

 

To comply with state tax guidelines, I am disclosing applicable taxes as follows:

 

Airbnb Payment: $ 1,256.00 ----------------

Gross Rent Income $ 1,104.18

Transient Tax 102.14

Gross Excise Tax 49.69 ----------------

Total $ 1,256.00 ______________

A reply is neither necessary nor expected.

Best regards and do enjoy the apartment.

 

Dean,

 

Thank you for taking the time to share your experience and best practices. They are especially helpful in getting my AirBNB up and complying with state tax legislature. 

My question is do you put your rental on Instant booking or Request to book setting?  I had mine Instant booking and had been getting a confirmation to accept the bookings.  But then I got one this morning that was 'automatically accepted' and booked.  Which is great, buuuut now I had to contact the booker to let them know of the taxation and price adjustment.

After doing my research I was going to start sending a "Special Offer" as Airbnb recommends with the taxation breakdown and included before accepting the booking...

Your thoughts and experience on the logistics would be greatly appreciated.

 

-Lauren

Hi Lauren,

 

Great question as I am curious myself. Did Dean ever answer?

Could u send me the Hawaii accommodation tax forms so that I could apply? Thanks

The problem as I see it as that Airbnb doesn't have an interface to specify the collected taxes separately from rent. That's required by Hawaii tax department, and it's not possible in Airbnb interface.

 

Vacation rental owners on Hawaii must specify explicitey how much tax they collect in the quote that that send to the guest. Taxes for transient accommodations in Hawaii are 13.42% (9.25% TAT + 4.1667% GET), only on Oahu GET is higher at 4.712%.

 

The following brochure (edition of 2016):

http://files.hawaii.gov/tax/legal/brochures/transient_accomodations.pdf

explains on page 3:

If you charge your guest or tenant a flat fee without separately stating the GET and the TAT, you are required to pay GET (including the 0.5% county surcharge if the transient accommodation is on Oahu) and TAT on the entire amount."

 

So, for example, if the rent for a rental accommodation on Maui is $1000, the owner must explicitely state $1000 rent + $134.2 Hawaii tax. If the owner quotes $1134.20 total, which implicitely includes $134.20 tax, this owner would legally own 13.42% of the $1134.20 - $152.21 insted of $134.20.

 

VRBO/HA have the payment interface that allows to do easily specify your occupancy tax and to include it in the quote.

 

I don't understand why Airbnb can't make such a chage in their payment interface. It's important not only to Hawaii owners, who 

literally break the Hawaiian tax code by not showing the state tax as a separate charge. We have a rental house in Lake Tahoe, and it's very inconvenient to "price in" the occupancy tax into the Airbnb rates.