HONOLULU (AP) — Hawaii Gov. David Ige’s administration and Airbnb Inc. are in talks over a private tax agreement that would have the vacation rental company collect taxes from its hosts and then send the money to the state.
Airbnb officials said collecting taxes from people who use the website to list their property would generate more than $30 million per year for the state, the Honolulu Star-Advertiser reported Wednesday.
The agreement must be signed by Ige and Airbnb before it takes effect.
Mike McCartney, Ige’s chief of staff, said privacy laws prevent the state from releasing details of the agreement until it is either signed or scrapped.
McCartney declined to say when that might happen.
“Ige is working with Airbnb and other online retailers of short-term rentals to negotiate voluntary collection agreements,” said Ige’s spokeswoman Cindy McMillan. “Ultimately, the state wants to collect the taxes it is owed without encouraging illegal activity.”
The agreement is generating mixed reactions from those who say it breaks a stalemate and others who say it was done behind closed doors.
McCartney said lawmakers were informed that Ige’s administration would attempt an administrative solution when the last legislative session closed without a tax collection bill.
“(Legislators) tried in good faith to find a solution,” he said. “The understanding is that we would try to see if we could do something administratively. We are going through our due diligence.”
McCartney said the agreement, which is about “efficient tax collection,” is intended to be just one step toward finding a balance that could also require state legislation as well as county regulation and enforcement.
“This is a big issue. It’s a public policy issue,” he said. “This is not meant to circumvent the (counties) or the Legislature.”
irbnb policy manager Matt Middlebrook said the company already has tax remittance agreements in place in more than 350 jurisdictions worldwide.
“We are committed to being a long-term partner with the state,” Middlebrook said. “That is why we have worked for the past three years to reach an agreement with legislators and the governor to collect and remit taxes on behalf of our hosts, and that remains our goal.”