STAND. COM. REP. NO. 3176

Honolulu, Hawaii

RE: H.B. No. 2009

H.D. 1

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Twenty-Ninth State Legislature

Regular Session of 2018

State of Hawaii

Sir:

Your Committee on Housing, to which was referred H.B. No. 2009, H.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAXATION,"

begs leave to report as follows:

The purpose and intent of this measure is to clarify the property types that may be furnished as transient accommodations and subject to the transient accommodations tax.

Your Committee received testimony in opposition to this measure from one individual. Your Committee received comments on this measure from the Department of Taxation, Office of Hawaiian Affairs, and Tax Foundation of Hawaii.

Your Committee finds that this measure provides further clarity on the property types that may be used as transient accommodations. However, your Committee notes the concerns raised in written testimony by the Tax Foundation of Hawaii that repealing the word "regularly" from the definitions of "lease", "let", or "rental" and "transient accommodations" may be problematic because the transient accommodations tax is designed to be a business privilege tax, and removal of the word "regularly" may cause an isolated instance of letting out a spare room or vacation home to trigger tax liability even though the taxpayer is not running a business.

Accordingly, your Committee has amended this measure by:

(1) Reinstating the word "regularly", as appropriate, under the definitions of "lease", "let", or "rental" and "transient accommodations";

(2) Clarifying that an accessory dwelling is a dwelling within an accessory dwelling unit; and

(3) Making technical, nonsubstantive amendments for the purposes of clarity and consistency.

As affirmed by the record of votes of the members of your Committee on Housing that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 2009, H.D. 1, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 2009, H.D. 1, S.D. 1, and be referred to your Committee on Ways and Means.

Respectfully submitted on behalf of the members of the Committee on Housing,

________________________________

WILL ESPERO, Chair