Hawaii GET and TAT on rental [merged]

[bridef]

Last night I received an email from Marriott Vacation Club basically saying if I rent my timeshare interest ,I will have to submit to the government of Hawaii a GET tax (General Excise Tax ) and a TAT tax (Transient Accommodations Tax. I have a week reserved which I was planning on renting but cannot begin to contemplate the paper work involved in trying to comply with this legislation. In trying to obtain knowledge of what is involved I came across information that says you need to register and obtain GET and TAT numbers, and then use these numbers in all adverts as well as the need to have a Contact Name if you do not reside on the island ?? I would greatly appreciate hearing from any members who rent their units in Hawaii to other people and what they have done in the past regarding this issue.

 

[DeniseM]

All Hawaii resorts collect the TAT from the guest at check-out (owners, renters, exchangers, alike.)

I don't know of anyone except perhaps large professional rental companies who collect the GET.

I think Marriott just sends that out as a "CYA."

 

[Quadmaniac]

Email from Marriott - Hawaii Taxes

I received an email from Marriott about Hawaii Taxes if we rent out our units, whether directly or through someone that taxes maybe be due and we are required to submit them. How can they prove we rented them out even ? It could be a guest I am allowing to stay for free.

Anyone else get the email ?

 

[Quadmaniac]

The following notice is being provided to you at the request of the Hawaii Department of Taxation.

NOTICE REGARDING HAWAII TAXES
The State of Hawaii imposes a General Excise Tax ("GET") and Transient Accommodations Tax ("TAT") on the proceeds of the rental of timeshare interests. If you elect to rent your timeshare interest whether on your own, through Marriott or through another operator, please note that unless arrangements are made for collection and payment of these taxes, you may be liable for the payment of both the GET and TAT due on the rental proceeds. Failure to timely remit these taxes to the Department of Taxation of the State of Hawaii may result in the assessment of the taxes, interest and penalties against you. Any such liability may be in addition to any federal or Hawaii income tax requirements.

Because each individual tax situation varies, you should consult with your accountant or other tax advisor regarding your filing requirements and with respect to the federal, state and local tax consequences of the rental of your timeshare interests.

The foregoing does not constitute and should not be construed as a legal or tax opinion or as legal or tax advice. The information in this letter is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.

 

[DeniseM]

As I recall, Marriott sent this notice out last year too.

I think Marriott sends it out so they can tell the State of Hawaii that they have provided legal notice to all their owners, and therefore, fulfilled their obligation.

If Marriott actually wanted to know, they would require owners to disclose if they were renting and for how much - Marriott doesn't actually want to know.

 

[Quadmaniac]

So essentially ignore it then ?

 

[DeniseM]

So essentially ignore it then ?

I'm sorry, but I am not qualified to advise you on your taxes.

 

[BocaBoy]

If I were going to rent out my unit I would comply with the law. It is the right thing to do. As Denise says, the resort collects the TAT. It is not that hard to file the other tax.

 

[maph]

If I were going to rent out my unit I would comply with the law. It is the right thing to do. As Denise says, the resort collects the TAT. It is not that hard to file the other tax.

Looks like you'd still have to file TAT. What the resort collects is based on owner occupied units, whereas the TAT for a rented unit is a percentage (9.25% for 2017) of the gross rental amount. There is probably going to be a difference between the two.

 

[lynne]

Looks like you'd still have to file TAT. What the resort collects is based on owner occupied units, whereas the TAT for a rented unit is a percentage (9.25% for 2017) of the gross rental amount. There is probably going to be a difference between the two.

Hope this helps:

"A transient accommodations tax is paid when the timeshare owner rents their timeshare property out to another individual – then the owner is required to file a tax (actually two types of taxes) to the State of Hawaii.

They are supposed to pay a general excise tax or what’s called GET and a transient accommodations tax which is 9.25%. The GET (general excise tax) is 4% of the gross rental income. So when a timeshare owner is renting his property out, then he is required to file for a GET tax number and also for a transient accommodations tax number. These are two separate numbers and once they have filed for these tax numbers they are required to file a GET form and a TAT form declaring those taxes."

 

[maph]

Hope this helps:

"A transient accommodations tax is paid when the timeshare owner rents their timeshare property out to another individual – then the owner is required to file a tax (actually two types of taxes) to the State of Hawaii.

They are supposed to pay a general excise tax or what’s called GET and a transient accommodations tax which is 9.25%. The GET (general excise tax) is 4% of the gross rental income. So when a timeshare owner is renting his property out, then he is required to file for a GET tax number and also for a transient accommodations tax number. These are two separate numbers and once they have filed for these tax numbers they are required to file a GET form and a TAT form declaring those taxes."

When you fill out the TAT form, does anyone know if you can claim what the resort collected from the renter against what you owe?

 

[tompalm]

If you rent using a website that reports to the state (Airbnb), or some other agency, the state might send you a bill next tax year. Someone told me Airbnb collects TAT, but I don't know if that is true. If you rent on your own to a friend, the state doesn't know that you rented it. If Marriott reports the name change to the state, I don't think the state would have time to question it. Right now, there are 1000s of weekly or daily rentals in violation of the state TAT where people are not paying the TAT and the city / state has their hands full trying to collect money from people who rent every week.

Regarding GET, that is just a sales tax on everything including rentals. So if you are a landlord, you pay 4.7 percent off the top and later pay tax on federal and state income from the rental. Again, the state is overwhelmed trying to collect GET from everyone doing weekly rentals that they don't have the time to deal with someone that does not file a Hawaii state tax return and only rents for one week.

 

[Dewnay]

If I were going to rent out my unit I would comply with the law. It is the right thing to do. As Denise says, the resort collects the TAT. It is not that hard to file the other tax.

I've been doing some research on the subject as I also received this email from Marriott. This is my take:

The resort does not collect the TAT. It collects what is called the TSO, or Time Share Occupancy Tax. This tax is imposed on the occupancy of a time share. The time share plan manager (e.g., Marriott) is responsible for collecting, reporting, and paying the TSO tax. It appears as the item "VOCC" in Marriott room bills.

The Transient Accommodations Tax (TAT) is a tax imposed on the gross rental income. The owner of the time share is responsible for this tax AND the General Excise Tax (GET). The TAT rate is 9.25% for 2016. The GET rate is 4% (4.5% in Oahu).

Any entity with income from renting property in Hawaii must also file Hawaii income tax returns. TAT and GET taxes may be taken as business expense deductions.

References:

GET: http://files.hawaii.gov/tax/legal/brochures/general_excise.pdf

TAT: http://files.hawaii.gov/tax/legal/brochures/transient_accomodations.pdf