Maui makes deal with Airbnb, Expedia to help enforce vacation rental laws

Maui County has entered into an agreement with Airbnb and Expedia Group, parent company of Vrbo, to get help from the short-term rental marketplaces in enforcing vacation rental laws.

Under the agreement, the platforms will require hosts to submit government-issued Tax Map Key (TMK) numbers, which identify property location, in order to be listed on the sites. Short-term rentals are prohibited in residential areas in Maui.

Hosts will also be required to provide transient accommodations tax (TAT) identification numbers for their properties to the marketplaces. Both the TMK and TAT numbers will appear on platform listings.

Properties that don’t have valid numbers will be removed from the sites, and the marketplaces will also take down noncompliant property listings identified by the county. The platforms have also agreed to provide monthly reports to the county on the TMK numbers of listings.

In December of 2020, Honolulu made a similar deal with Airbnb and Expedia, and Kauai signed similar agreements with the marketplaces earlier last year.

Short-term rental income in the state of 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. 

A recently passed state law also allows counties to levy their own transient accommodations tax (TAT) of up to 3% on top of the existing state TAT. Counties will no longer receive state TAT money, but will be able to raise their own funds via the county surcharge once they pass laws levying the new tax. The state has withheld county shares of the TAT since spring of 2020 due to the pandemic.

Maui officials are currently working out the details of implementing the new tax in the county.

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.

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.

Photo by Satty Singh on Unsplash