What is the Resort Tax in Hawaii?

Millions of tourists travel to Hawaii each year, making it one of the most well-liked tourist destinations in the world. The resort tax, also known as the temporary accommodations tax (TAT), was put in place by the state to promote the tourism sector. The state of Hawaii levies a tax known as the resort tax on all hotel and resort lodging, including short-term rentals.

Hawaii now levies a 10.25% resort tax. All short-term rentals, including those on platforms like Airbnb, VRBO, and others, are subject to this tax. The tax is computed using the whole rental cost, which includes any service fees, cleaning fees, and other costs. The Hawaii Department of Taxation is responsible for collecting the tax, which is used to pay for a number of initiatives to boost the local economy and tourism.

Large landowners, including the state government, the federal government, and private landowners, control the vast bulk of the property in Hawaii. The state of Hawaii owns about 1.2 million acres of land, while the federal government owns about 1.8 million acres, according to a research by the Hawaiian Legacy Reforestation Initiative. The remaining land is owned by private landowners, including huge corporations and affluent people.

In Hawaii, vacation rental by owner (VRBO) is a well-liked website for short-term rentals. Hawaii has put in place stringent laws governing short-term rentals, including VRBOs. In order to lawfully run a VRBO in Hawaii, the owner needs both a General Excise Tax (GET) license and a Transient Accommodations Tax (TAT) license. The owner must also acquire a permit from the local government and adhere to zoning and building code regulations. Fines and legal action may be imposed for breaking these rules.

The general excise tax (GET), sometimes known as a city tax, is present in Honolulu. All companies doing business in Honolulu, including hotels, eateries, and retail outlets, are subject to the GET tax. Honolulu’s tax rate is currently set at 4.5 percent. In Honolulu, in addition to the GET, there is also a tax on hotel and resort lodging, including short-term rentals, known as the transient accommodations tax (TAT).

The resort tax in Hawaii, which is currently fixed at 10.25%, is the same as the hotel tax in Waikiki. All hotel and resort lodgings in the state of Hawaii, including short-term rentals, are subject to this tax. The general excise tax (GET), which is imposed on all companies operating in Honolulu and includes hotels, restaurants, and retail stores, must be paid by hotels in Waikiki in addition to the resort tax. In Honolulu, the GET is now subject to a 4.5% tax rate.