STAND. COM. REP. NO. 1193

Honolulu, Hawaii

RE: H.B. No. 1043

H.D. 3

S.D. 1

Honorable Ronald D. Kouchi

President of the Senate

Thirty-First State Legislature

Regular Session of 2021

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred H.B. No. 1043, H.D. 3, entitled:

"A BILL FOR AN ACT RELATING TO TRANSIENT ACCOMMODATIONS TAX,"

begs leave to report as follows:

The purpose and intent of this measure is to amend chapter 237D, Hawaii Revised Statutes, relating to the transient accommodations tax by:

(1) Repealing the misdemeanor criminal penalty for failing to register under and replace it with a monetary fine structure;

(2) Replacing references to "operator or plan manager" with the terms "person" or "taxpayer";

(3) Clarifying that a certificate of registration is required for persons advertising transient accommodations;

(4) Applying the personal liability provision under general excise tax law to the transient accommodations tax; and

(5) Making various technical amendments.

Your Committee received testimony in support of this measure from the Department of Taxation. Your Committee received comments on this measure from Airbnb and one individual.

Your Committee finds that the transient accommodations tax serves as an important source of revenue for the State. Your Committee further finds that a number of inconsistencies, loopholes, and ambiguities have been identified that adversely affect enforcement and administration of the transient accommodations tax. This measure assists the Department of Taxation in the imposition of the transient accommodations tax by simplifying and streamlining certain provisions and processes.

Your Committee has amended this measure by:

(1) Clarifying that the registration requirement for persons other than transient accommodations brokers, travel agencies, or tour packagers applies only to persons who are subject to the transient accommodations tax;

(2) Replacing "operator and plan manager" with "taxpayer" to conform with other amendments made by the measure;

(3) Changing the effective date to January 1, 2022; and

(4) 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 Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of H.B. No. 1043, H.D. 3, as amended herein, and recommends that it pass Second Reading in the form attached hereto as H.B. No. 1043, H.D. 3, S.D. 1, and be referred to your Committee on Ways and Means.

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

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KARL RHOADS, Chair