Airbnb says it will not help the state collect taxes if the state adopts pending legislation.

1. Friday, February 23, 2018
Laurel A. Johnston, Director of Finance
State of Hawaii Department of Budget and Finance
Department of Budget and Finance
P. O. Box 150
Honolulu, Hawaii 96810
Linda Chu Takayama, Director of Taxation
State of Hawaii Department of Taxation
830 Punchbowl, Room 221
Honolulu, HI 96813
Dear Director Johnston and Director Takayama:
It has come to our attention that there will be a Senate Ways and Means Committee Informational Briefing
on February 28th to discuss, among other items, the “$33 million individual vacation rentals legislative
proposal on page one in the Fiscal Year 2019 Supplemental Budget Financial Plan”.
We presume that the projected revenue number cited in this discussion item is based on potential
revenue from online travel platforms, including Airbnb, if they were allowed to collect and remit hotel taxes
on behalf of its hosts.
We continue to express that it is our desire to be a good partner to the State and collect and remit taxes
on behalf of our hosts. Senate Bill 2963, SD 1 is before the State Legislature which would allow platforms
to voluntarily collect and remit taxes on behalf of hosts but under conditions that are onerous and violate
federal law. And while we support the bill’s intent to allow us to collect and remit taxes, we want to be
clear - ​if SB 2963, SD 1 is adopted as it is currently drafted, Airbnb ​will not ​enter into a voluntary
agreement with the State to collect and remit taxes, and thus the potential revenue from the bill would not
be realized​.
For the past three years, Airbnb has worked with stakeholders at all levels to identify the best way to
collect and remit taxes on behalf of its hosts in Hawaii. Last year at the request of the Governor’s Office,
we worked for a number of months to negotiate a voluntary collection agreement that would have allowed
Airbnb to collect and remit taxes, but no agreement was reached. Absent such an agreement, state
legislation is required to allow platforms to collect and remit taxes on behalf of hosts. As you know, we

2. supported various tax collection bills in the last two legislative sessions, none of which were ultimately
passed.
Had a voluntary collection agreement been finalized or enabling legislation enacted, Airbnb would have
collected and remitted approximately $30 million in revenue​ in 2017 alone.​ Unfortunately, these efforts
have stalled and Hawaii continues to lose out on valuable additional tax revenue and unfortunately SB
2963 SD 1 will not change that.
We will continue to support efforts to collect and remit taxes from our hosts in Hawaii, like we have in over
340 jurisdictions around the world. However, we can not support SB 2963, SD 1 which is currently before
the State Legislature. We believe that a more streamlined, efficient way to collect and remit taxes that is
compliant with federal law should be the path for the State of Hawaii as the individual counties consider
new regulations for the industry. We look forward to continuing to work with state and county officials to
that end.
We have previously submitted testimony to the Ways and Means Committee from our company and our
counsel, David Louie, that clearly articulates our concerns with the bill.
Should you have any questions, please contact us.
Matt Middlebrook
Head of Public Policy, Hawaii
Cc: Ford Fuchigami, Administrative Director, Office of the Governor
Senator Donovan M. Dela Cruz, Chair, Committee on Ways and Means