Hawaii bucks trend with likely veto of Airbnb tax bill

HONOLULU — Hawaii is bucking a trend now that Gov. David Ige said he intends to veto a bill that would allow online lodging services like Airbnb to collect state and local taxes.

In nearly 200 jurisdictions around the world, Airbnb is collecting taxes on behalf of hosts who rent out private rooms and lodgings, and dozens of cities and counties are clamoring for a similar arrangement with Airbnb, said Chris Lehane, head of global policy and public affairs for Airbnb.

“We would really like to put a pile of tax money there at the bottom of the Hawaii rainbow if we can,” Lehane told The Associated Press. “Most states see this as a huge thing. We are really puzzled.”

While states have debated the right way to regulate private vacation rentals, The National Conference of State Legislatures isn’t aware of any other governor vetoing legislation on short-term occupancy, said Max Behlke, manager of state federal relations.

The bill passed the Hawaii Legislature in May, after debate over the proliferation of illegal campsites and other rentals listed on Airbnb. At one point the bill required Airbnb or other brokers to verify that their rental listings were legal, but that section was removed from the bill after opposition from Airbnb.

“There was a lot of concern expressed by many that the bill would facilitate illegal rentals, and I do have big concern about that,” Ige told The Associated Press. “I do understand the Airbnb model has been very successful, and we need additional vacation rentals to support millions of visitors that are coming to our islands.”

Hawaii’s affordable housing crisis and its status having the nation’s highest rate of homelessness per capita played into Ige’s decision to put the bill on his intent-to-veto list, he said. “We do know that having properties or accommodations available to residents is part of the long term solution to homelessness, and I personally would rather have rental units available to residents rather than to visitors,” Ige said.

Lehane says Airbnb wants to work with counties on dealing with enforcement of local laws, but the bill was just a tax collection measure.

He said Airbnb created a policy in San Francisco stating that hosts could only list rentals from their primary homes where they lived. “The principle behind that is to make sure they’re not taking housing off the market,” Lehane said. Chicago is using revenue from Airbnb taxes to address homelessness, he added.

Behlke thought the company had other reasons for pushing back on verifying whether rentals on the website are legal. “If they find out that 35 percent of people offering rooms to stay on aren’t following local laws, they just cut down 35 percent of their market share, and that’s going to cut into their revenue,” he said. “I think that’s what they’re concerned about.”