RESOLUTION

WHEREAS, chapter 237D, Hawaii Revised Statutes (HRS), imposes the transient accommodations tax (TAT), commonly known as the hotel room tax, on such transient accommodations as hotels, motels, and other places in which lodgings are regularly furnished to transients for consideration; and

WHEREAS, all transient accommodations are required under section 237D-4, HRS, to register with the Department of Taxation and to obtain a TAT license to legally operate; and

WHEREAS, transient accommodations include "bed and breakfast" operations, which are located in private residences in residentially zoned neighborhoods wherein the owner also occupies the same premises; and

WHEREAS, a bed and breakfast operation is a type of "transient residential vacation rental" that is usually located in residentially zoned areas; and

WHEREAS, many bed and breakfast operations are unregistered and unlicensed, and operate illegally; and

WHEREAS, some operators of bed and breakfasts and of transient residential vacation rentals may be in violation of county zoning laws as they lack the required permit, and in violation of the transient accommodations tax laws because they are not registered and licensed; and

WHEREAS, many transient residential vacation rentals and bed and breakfast operations advertise over the internet, so their identities are known or can be known readily to the counties and to the Department of Taxation; and

WHEREAS, pursuant to section 237D-6.5, HRS, the transient accommodations tax revenues are distributed to the counties, convention center enterprise special fund, tourism special fund, state parks special fund, special land and development fund to fund the Hawaii statewide trail and access program, and the transient accommodations tax trust fund; and

WHEREAS, any loss of revenue from the transient accommodations tax has wide-ranging effect on broad categories of programs and county revenues that depend on the TAT;

WHEREAS, the counties are not effectively addressing the issue of regulating these types of visitor accommodations, resulting in the loss of general excise or transient accommodations tax revenues, or both, and placing owners of these types of visitor accommodations in a tenuous position of not knowing what the future holds; and

WHEREAS, those who have been operating legal bed and breakfast homes and transient vacation units and paying their taxes deserve the peace of mind that their industry is being appropriately regulated; and

WHEREAS, the bed and breakfast home and transient vacation unit industry recognizes that the counties are the appropriate governmental entity to regulate their industry; now, therefore,

BE IT RESOLVED by the Senate of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2005, the House of Representatives concurring, that the Department of Taxation is requested to enforce the collection of the transient accommodations tax on bed and breakfast operations and on transient residential vacation rentals, especially those that advertise over the internet; and

BE IT FURTHER RESOLVED that the Department of Taxation and the counties with support from the Hawaii Tourism Authority cooperate for the purpose of enforcement; and

BE IT FURTHER RESOLVED by the House of Representatives of the Twenty-third Legislature of the State of Hawaii, Regular Session of 2005, the Senate concurring, that the City and County of Honolulu, the County of Hawaii, the County of Maui, and the County of Kauai, are requested to determine and establish appropriate regulatory requirements for bed and breakfast homes and transient vacation units in their respective counties, including the consideration of imposing a licensing fee to support the county policy; and

BE IT FURTHER RESOLVED that the Department of Taxation, as well as the City and County of Honolulu, County of Kauai, County of Maui, and County of Hawaii each report to the Legislature on the progress and results of their efforts, and describe its action plan no later than twenty days prior to the convening of the Regular Session of 2006; and

BE IT FURTHER RESOLVED that the report include, but not be limited to, proposals for legislation, if any; and

BE IT FURTHER RESOLVED that certified copies of this Concurrent Resolution be transmitted to the Governor, Director of Taxation, and the respective Mayors and County Councils of the City and County of Honolulu, and the Counties of Kauai, Maui, and Hawaii and the Hawaii Tourism Authority.