At this point in the large-scale movement toward use of extra rooms and detached cottages as Airbnbs and VRBOs, it appears that the State of Hawaii and Honolulu City & County zoning laws remain inconsistent and the State – if not the City & County of Honolulu — are largely turning a blind eye toward those mom-and-pops who rent out their properties as transient accommodations in violation of City land use rules. 

Most operators of transient accommodations wrongly assume that if they pay the Hawaii transient accommodation tax (or “TAT”) they are complying with Hawaii law.  The reality is that if you have begun operating a transient accommodation in the last several years you are likely violating City land use laws. 

The most recent official publication on transient accommodation, Governor Ige’s “An Introduction to Transient Accommodation Tax”, republished online in July 2017, seems to suggest that the State has taken interest in collecting taxes on illegal vacation rentals.  And since the City has not issued vacation rental permits since 1987, the very title to the 20-page pamphlet seems to address the new wave of people illegally operating vacation rentals.  The pamphlet itself contains no guidance or comment whatsoever on the legality of operating a vacation rental. 

In 2016, the Hawaii Legislature passed a bill (House Bill 1850) that would license brokers of transient accommodations to collect TAT, however, that bill was vetoed by Governor Ige. 

The requirements for vacation rentals have not changed much in the last five years.   

  1. Operators of vacation rentals must have both a general excise tax license (“GET”) and a transient accommodation. Non-residents with vacation rentals must provide an on-island contact to the homeowners association and on the rental contract. 
  2. Everyone is required to have a GET and a TAT license (TAT for rentals less than 180 days), collect and pass those taxes on to the state.
  3. Everyone is required to file a state income tax return whether you owe taxes or not (the tax computation is only on Hawaii source income for non-residents). The taxpayer or spouse is doing business in Hawaii during the taxable year regardless of whether the taxpayer or spouse derives any taxable income from that business. “Doing business” includes all activities engaged in or caused to be engaged in with the object of gain or economic benefit, direct or indirect, except personal services performed as an employee under the direction and control of an employer. 
  4. You must show your Tax ID# (GE T and TAT) in any advertising. 
  5. File a 1099-Misc if you pay any vendor, such as a contractor, attorney, or any other for any services of $600 or more.’s sole legal help section states: “Some cities have laws that restrict your ability to host paying guests for short periods. These laws are often part of a city’s zoning or administrative codes. In many cities, you must register, get a permit, or obtain a license before you list your property or accept guests. Certain types of short-term bookings may be prohibited altogether. Local governments vary greatly in how they enforce these laws. Penalties may include fines or other enforcement. 

These rules can be confusing. We’re working with governments around the world to clarify these rules so that everyone has a clear understanding of what the laws are.  In some tax jurisdictions, Airbnb will take care of calculating, collecting, and remitting local occupancy tax on your behalf. Occupancy tax is calculated differently in every jurisdiction, and we’re moving as quickly as possible to extend this benefit to more hosts around the globe. 

In the meantime, please review your local laws before listing your space on Airbnb. More information about your city’s laws and regulations may be available on ourResponsible Hosting page in the Your City’s Regulations section. 

By accepting our Terms of Service and activating a listing, you certify that you will follow your local laws and regulations.” 

Using traveler’s insurance to cover damage your guests make to appliances, etc. VRBO recommends which costs $59 for $1,500 in coverage with no deductible. is even less helpful than in providing guidance as to how to keep your business in compliance with the law. It simply says to have a rental agreement “for each reservation and be sure to include the names of all parties, checkin/checkout dates, rental amounts, payment schedules, and of course, your cancellation and refund policies. We also recommend including house rules and policies around cleaning fees, pets, and smoking.” 

Whether or not an entire building can be used for transient accommodations must now specifically be stated in its declaration, Stanley Kuriyama, Honolulu Commissioner of the Real Estate Commission, said. 

A review by my office of the minutes of the Real Estate Commission’s minutes from 2009 to 2017 revealed that the Commission has taken up the matter of transient accommodations twice and only to the extent as the matter has been raised by private entities seeking to have the Commission declare whether or not a condominium’s declaration provides for the specific use of the condominium as a transient accommodation or whether the Commission supported further extensions of the State tax on transient accommodations.