Airbnb denounces Hawaii for subpoenaing hosts’ records

Hawaii: Airbnb is fighting back against Hawaii’s attempt to find tax delinquents by subpoenaing hosts’ records of 10 years of invoices and receipts.

Airbnb called subpoenaing hosts’ records an unprecedented “massive intrusion” that violates state and federal law.

The company said in a filing in Hawaii Circuit Court that the request would cover private data of around 16,000 people and the state had not shown why it should be allowed to “invade the privacy rights of Airbnb and its users on this massive scale”.

When have Airbnb and local governments clashed before on this issue?

It represents the latest in a line of clashes between Airbnb and local governments.

Last month in New York, a judge blocked a city law that would have required rental 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.

However, district judge Paul A. Engelmayer ruled that forcing platforms to reveal a “breathtaking” amount of information about their businesses would be an unconstitutional intervention.

Would subpoenaing hosts’ records be violating the law?

In the Hawaii case, Airbnb’s attorneys said subpoenaing hosts’ records would equate to authorising the state to go door-to-door in search of people violating the law, which is an unconstitutional action.

Hawaii has tried to ensure vacation rental operators pay transient accommodation taxes imposed on rooms or homes rented for less than six months. It also wants to collect the general excise tax from rental owners.

A study commissioned by the Hawaii Tourism Authority estimated the state could have generated $136 million in transient accommodations taxes from so-called “alternative accommodations” last year.

How many vacation rentals operate illegally in Hawaii?

This adds to the fact many Hawaii vacation rentals are operated illegally.

In Hawaii, the necessary permits are issued by counties which have varying regulations, while its most populous county Honolulu has not issued revised permits since 1989 despite several attempts to agree on more effective ones. It is estimated to have 800 legal vacation rental units and about 10 times that in illegal ones.

Airbnb informs 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 once adopted legislation that would have allowed sites like Airbnb to collect taxes on behalf of short-term rental operators while the counties prepared revised regulations. However, democrats vetoed the legislation due to concerns that such a law would encourage people to rent rooms and homes illegally.

Airbnb said in its court filing that the state had offered no evidence that any of its users underpaid taxes.

Last year, Hawaii asked a court to allow the subpoena to find which hosts had not paid the state’s equivalent of hotel and sales taxes. The state needs the court’s permission to serve the subpoena as its investigation targets groups of taxpayers rather than specific individuals.

A hearing on the issue is scheduled for Thursday 7 February.