Honolulu makes deal with Airbnb, Expedia on short-term rental law enforcement

Airbnb and Expedia Group (parent company of HomeAway and Vrbo) have agreed to help Honolulu enforce short-term rental laws by requiring hosts to provide government-issued property identification and tax registration numbers.

Under the agreement, hosts must submit government-issued Tax Map Key (TMK) numbers, which identify property location, to the short-term rental platforms in order to be listed on the sites.

Existing hosts will have 60 days after the agreement goes into effect to provide valid numbers. Hosts whose numbers are missing or invalid will be taken off the sites until they can offer the required information.

The platforms will share listings information with the city in monthly reports for verification that rentals are operating legally.

Airbnb and Expedia separately signed TMK number agreements with Kauai earlier this year, the first such deals between short-term rental platforms and governments in Hawaii.

Oahu hosts will also be required to provide Transient Accommodations Tax (TAT) identification numbers for their properties to the platforms. Both the TMK and TAT numbers will appear on platform listings.

Short-term rental income in Hawaii is subject to TAT as well as general excise tax (GET). Vacation rental operators can pass these taxes on to guests, but hosts must register with the state, collect and pay the taxes, and file regular tax returns. 

While short-term rental platforms collect taxes on behalf of their hosts in many states, they’re not allowed to do so in Hawaii. That means hosts are responsible for taking care of tax obligations. MyLodgeTax can help Hawaii short-term rental hosts by automating tax compliance.

Honolulu strictly regulates vacation rentals, allowing only around 800 unhosted, whole-home rentals, called “transient vacation units,” in specific areas. However, authorities have found it difficult to enforce the laws, and it’s estimated that around 8,000 short-term rentals are operating illegally.

A law passed last year allows approximately 1,700 hosted units (called "bed-and-breakfast homes") to operate on the island. That program was originally scheduled to start in October, but the City Council changed the start date to April 30, 2021. Existing hosts will have 60 days after bed-and-breakfast registration begins to provide valid TMK and TAT numbers.

Oahu short-term rentals recently reopened for business after being shut down since April due to the COVID-19 pandemic. The island has moved on to its next phase of economic reopening, which allows legal vacation rentals to operate. Hawaii is now allowing tourists to visit without a quarantine if they’ve tested negative for COVID-19 up to 72 hours before their flight. 

For more on lodging taxes in Hawaii, see our state Vacation Rental Tax Guide. If you have tax questions related to vacation rental properties, drop us a line and we’ll get back to you with answers.