Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2005

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.C.R. No. 42, S.D. 1, entitled:

begs leave to report as follows:

The purpose of this measure is to request the Department of Taxation to enforce the collection of the transient accommodations tax on unregistered vacation rentals.

This measure also requests the counties to enforce the zoning laws against illegal operations of vacation rentals.

Your Committee finds that many vacation rentals, including bed-and-breakfast facilities, are operating illegally without transient accommodation tax licenses, resulting in the loss of revenue from the transient accommodations tax. These vacations rentals in many cases operate in residential districts, in violation of local zoning laws. These violations in many instances overly burden neighborhood infrastructure and otherwise threaten the quiet enjoyment of local neighborhoods. This measure requests that the Department of Taxation enforce the collection of the transient accommodations taxes on these vacation rentals, particularly those advertising on the Internet. Further, this measure requests that the counties enforce their laws and regulations of these vacation rentals, particularly those operating in residential neighborhoods.

Your Committee further finds that Maui County has already taken a stance on the illegal operation of vacation rentals through its program to step-up the permitting of transient vacation rentals and is currently working with the industry to address this problem.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee concurs with the intent and purpose of S.C.R. No. 42, S.D. 1, and recommends its adoption.