Airbnb is pushing back against Hawaii’s attempt to find tax delinquents by subpoenaing 10 years’ worth of invoices, receipts and other records from the home-sharing platform’s island hosts, calling it an unprecedented, “massive intrusion” that violates state and federal law.
The company said in a filing in Hawaii Circuit Court on Wednesday that the request would cover detailed, private data from about 16,000 people. The state has failed to show why it should be allowed to “invade the privacy rights of Airbnb and its users on this massive scale,” the company said.
It’s the latest clash between the San Francisco-based company and local governments. In New York, a U.S. judge last month shelved a city law that would have required home-sharing platforms to reveal hosts’ names and other information. New York City established the law so it could crack down on illegal listings and impose fines.
But U.S. District Judge Paul A. Engelmayer, in issuing a preliminary injunction, ruled that forcing home-sharing platforms to reveal a “breathtaking” amount of information about their businesses seemed unconstitutional.
Airbnb Criticizes Attempt By Hawaii To Subpoena Hosts’ Records
Hawaii wants to collect taxes from owners of vacation rentals, many of which operate illegally, but Airbnb says the sweeping request is unconstitutional.By The Associated Press / January 31, 2019 Reading time: 4 minutes.
The state wants to subpoena businesses records of local vacation rentals, like this one on the North Shore, to ensure they are paying accommodation taxes.
In the Hawaii case, Airbnb’s attorneys argued that allowing the subpoena would be equivalent to authorizing the state to go door-to-door in search of people violating the law — something that is unconstitutional.
Hawaii has been trying to make sure vacation rental operators are paying transient accommodation taxes imposed on rooms or homes rented for less than six months. It also wants to collect the general excise tax — a levy similar to a sales tax — from vacation rental owners.
The state attorney general’s petition for the subpoena notes a study commissioned by the Hawaii Tourism Authority estimating the state could have generated $136 million in transient accommodations taxes from so-called “alternative accommodations” last year.
It did not say how much tax revenue was collected from such places.Complicating the matter is the fact that many Hawaii vacation rentals are operated illegally. In Hawaii, the necessary permits are issued by counties which have varying regulations. Honolulu, the most populous county, has not issued new permits since 1989. It’s estimated to have 800 legal vacation rental and bed-and-breakfast units and about 10 times as many illegal ones.The Honolulu City Council and mayor have been unable to agree on more effective regulations despite several attempts over the years.
Airbnb tells hosts in Hawaii they are required by state law to post their tax IDs on their listings and that they must obtain certificates from the state tax department.
State lawmakers in the past adopted legislation that would have allowed sites such as Airbnb to collect taxes on behalf of short-term rental operators while the counties devised new regulations. But Gov. David Ige, a Democrat, vetoed the legislation because of concerns such a law could encourage people to rent rooms and homes illegally.
Airbnb said in its Wednesday court filing that the state has not offered evidence that all, or even most, of its users underpaid taxes. The state has also failed to narrow the subpoena to a particular group likely to have underpaid taxes, it said.
“Both Hawaii and federal law forbid such fishing expeditions,” the filing said. Airbnb said the state Department of Taxation has not sought records on a similar scale from any other Hawaii businesses.
Hawaii asked a court last year to allow the subpoena to help it find which hosts have not paid the state’s equivalent of hotel and sales taxes. The state needs the court’s permission to serve the subpoena because its investigation is targeting a group of taxpayers and not specific individuals.
A hearing on the issue is scheduled for Feb. 7.
