Transient Accommodations Tax (TAT)

www.hawaiicountiestat.us

ANNOUNCEMENT NO. 2024-01

February 12, 2024

Hawai'i County Transient Accommodations Tax (HCTAT) -
2023 Taxpayer Activity Summary Distribution and Payment Processor Updates

The purpose of this Announcement is to notify the public of the HCTAT Taxpayer Activity Summary (Activity Summary) starting Febuary2024 to provide information for taxpayers subject to the HCTAT for tax year 2023.

This announcement is also to notify taxpayers who utilize our online payment portal that our payment processor will be switching to WorldPay. Our anticipated date of the switch is April 1, 2024. If you encounter any payment issues, please contact our payment processor at 866-219-1476 or email paymentsupport@catalisgov.com.

HCTAT Taxpayer Activity Summary
The Activity Summary will be prepared annually for taxpayers with HCTAT activity for the year. The Activity Summary will be distributed to taxpayers approximately in February of each year. An example of the Activity Summary is available below as well as descriptions for the various data elements contained in the statement.

CLICK HERE for an example of the Activity Summary.

CLICK HERE for Activity Summary Descriptions.

Annual Return and Reconciliation (Form TA-2)
The State of Hawaiʻi Form TA-2 is used to report your State Transient Accommodations Tax (TAT) and Timeshare Occupancy (TSO) tax activities for the taxable year. It may also be used to correct errors on the periodic tax returns (Form TA-1). The information provided to the State of Hawaiʻi on the State Forms TA-1 and TA-2 is used by the State to generate reports to the counties and form the bases for the counties' TAT determinations. More information regarding your obligations for State TAT can be found at https://tax.hawaii.gov/forms/a1_b2_2tat/.

If you must pay TAT or TSO on properties located in Hawaiʻi County, you must also pay HCTAT.

IMPORTANT INFORMATION

Registration
Chapter 2, HCC, provides that all operators, timeshare plan managers, transient accommodations brokers, travel agents, and tour packages subject to the HCTAT must have a State TAT license issued pursuant to sections 237D-4 or 237D-4.5, HRS. Taxpayers who are registered with the State and have a valid State TAT number, will be deemed registered for HCTAT. Taxpayers subject to the HCTAT do not need to register separately with the County of Hawai'i.

You may also need to have a County Short-Term Vacation Rental permit.

Tax Returns
Under Section 2, HCC, the County Director of Finance has the authority to prescribe how periodic and annual County TAT returns are filed. The County Director of Finance has determined that State TAT returns filed with DOTAX will also be deemed to have been filed with the County of Hawai'i. Therefore, taxpayers who are subject to the HCTAT will only need to file Forms TA-1 and TA-2 with DOTAX, as they are currently required. Taxpayers subject to the HCTAT will not need to file separate HCTAT return with the County of Hawai'i.

Payment Due Dates
HCTAT payments are due concurrent with the State TAT returns and payments. Thus, payments are due on or before the 20th day of the calendar month following the close of the filing period. For periodic returns, taxpayers are required to file Form TA-1 on either a monthly, quarterly, or semi-annual basis.

The annual reconciliation of the State TAT return (Form TA-2) is due on or before the 20th day of the fourth calendar month following the close of the taxable year. As a general rule, a HCTAT payment will only be due if taxable gross rental proceeds or fair market rental value attributable to County of Hawai'i is reported on Form TA-2 and not reported on Form TA-1 during the taxable year. If an HCTAT payment is due, filing of Form HCTAT-2 and payment must be made by the deadline. For calendar year taxpayers, the deadline is April 20.

How to Calculate and Make HCTAT Payments
To calculate the HCTAT payment, multiply the sum of the taxable gross rental proceeds and fair market rental value less any applicable exemptions attributable to County of Hawai'i by 3 percent.

Payment Methods The County of Hawai'i will accept HCTAT payments in the following methods:

By Mail:

Mail payment with the payment voucher HCTAT-1 form to:
County of Hawai'i
Hawai'i County TAT Office
25 Aupuni Street, Suite 1101
Hilo, HI 96720

Note: Please do not send cash. All checks should be made payable to the “Director of Finance” in U.S. dollars drawn on any U.S. bank. Attach your check to the payment voucher HCTAT-1. The following information should be written on your check so payment will be properly credited if the check is separated from the payment voucher form:

HCTAT
The filing period
Your State TAT ID number
Your daytime phone number
Click here to download a payment voucher form (Form HCTAT-1)
Click here to download a reconciliation voucher form (Form HCTAT-2)

Online:

Electronic Funds Transfer (EFT) payments will be accepted via the County's online payment portal at www.hawaiicountiestat.us. EFT payments require bank verification, which can take up to 4 days. A $.50 fee per transaction will be assessed. If your payment needs to completed sooner, please remit your payment using other payment method. *Payments by credit card are assessed higher convenience fees.

Taxpayers whose liability for the TAT exceeds $100,000 per year are required to pay tax by EFT. ACH payment that will be made via the County’s online payment portal will satisfy this requirement.

Bulk Filers:

HCTAT payments for multiple State TAT ID numbers may be remitted via ACH debit from an established banking institution rather than submitting individual EFT payments through our online payment portal for each taxpayer being represented. A one-time Bulk Filers Program Registration Form must be completed and submitted to the HCTAT Office. Additionally, detailed payment information, in an Excel file format (HCTAT’s Bulk Filers Sample File) and payment confirmations must be submitted via email at HawaiiCountyTATBulkFilers@hawaiicounty.gov as soon as a payment has been made. To register for this program and for eligibility requirements, please refer to the HCTAT Bulk Filers Instructions Manual.

IMPORTANT: Commercial Bank Account Holders with an account covered by ACH Debit Block Service must provide their financial institution with the County’s ACH Debit ID No. 1996000567.

For more information contact the HCTAT Office. DOTAX will not be able to answer any questions regarding the HCTAT.

CONTACT US

Hawai'i County TAT Office

Email:

HawaiiCountyTAT@hawaiicounty.gov

Mailing Address:

Hawai'i County TAT Office
25 Aupuni Street, Suite 1101
Hilo, HI 96720
(808) 961-8793

FAQs

What is the County Transient Accommodations Tax?

Act 1, in lieu of the counties receiving a distribution from the State, provides authority for a Countywide Transient Accommodations Tax within the Hawai'i County Code which implements the HCTAT. On December 8, 2021, Hawai'i County Council passed Ordinance No. 21-89, Bill No. 81 (2021), Draft 2 establishing a rate of 3 percent on all gross rental, gross rental proceeds, and fair market rental value considered taxable under the definitions of Section 237D-1, Hawai`i Revised Statutes (HRS).
Who has to pay the HCTAT?

General rule of thumb is if you pay the State TAT, you will need to pay the County. All operators, plan managers, transient accommodations brokers, travel agencies, or tour packagers within the County must hold State registration in accordance with Sections 237D-4 and 4.5, HRS. This also applies to every transient accommodation broker, travel agency, and tour packager who arranges transient accommodations at non-commissioned negotiated contract rates.
When is this effective?

The HCTAT became effect as of December 10, 2021 when it was signed into law. The HCTAT is levied as of January 1, 2022.
When are payments due?

Since the levy date begins on January 1, 2022, those who pay the State TAT on a monthly basis will also need to remit their first payment to the County on or before February 22, 2022. For quarterly filers, the first deadline covering the period January 1, 2022 through March 31, 2022, will be due on April 20, 2022. The timing of payments will coincide with the State. The first annual reconciliation is due on April 20, 2023, covering the period January 1, 2022 through December 31, 2022. Every annual reconciliation thereafter will cover the entire previous calendar year and will be due on April 20.
Can I just make one payment for both the State and County portions?

Unfortunately, the answer is no. Separate payments will need to be made to the State Department of Taxation (DOTAX) and to the County Director of Finance. Act 1 (2021), prevented DOTAX from assisting the counties with billing and collection of the County TAT. The County will maintain a separate County TAT account for each taxpayer. If a single payment is made to the State that includes both State and County TAT, you will receive a refund of the portion not owed to the State. You will then have to remit the payment separately to the appropriate jurisdiction.
Do I have to file a separate return with the County of Hawaiʻi?

No, a report filed with DOTAX will be deemed as filed with the County. However, the HCTAT payment, will have to be separately remitted to the County Director of Finance (“Director”). A payment voucher will be available online for your use.
If I don't have to file a separate return, how will you know how to apply my payment

You will be required to include your State TAT Tax I.D. number on the payment voucher with each payment made to the County. This will allow the County to properly credit your County TAT account.
What happens if I don't pay?

The Director has the authority to estimate tax liability of the operator or plan manager from any information obtained from DOTAX. The Director may assess the taxes, interest, and penalty due to the County and make a demand on the payment.

If there is an intent to evade tax, the tax may be assessed or levied at any time; provided that the burden of proof with respect to the issues of falsity or fraud and intent to evade tax shall be upon the County.

For late payments, the Director has the authority to collect interest and penalties. Penalties and interest are assessed on any tax that is not paid on time. If the tax is not paid within 60 days of the due date, a penalty of 20% of the unpaid balance will be assessed. If you are required to pay by electronic funds transfer (EFT) and do not timely pay by EFT, a penalty of 2% will be assessed on the tax due. Interest is assessed at the rate of 2/3 of 1% per month or part of a month on any unpaid taxes and penalty. If a payment is dishonored, a $30 service fee is assessed.

Important: Payments are applied to the fees first, then interest, then penalty, and then the tax.
Can I pass the County Transient Accommodations Tax on to the visitor?

Yes, the HCTAT may be passed on to the visitor.
How do I pay my County Transient Accommodations Tax?
The County of Hawai'i will accept HCTAT payments in the following methods:

By Mail:

Mail payment with the payment voucher form to:
County of Hawai'i
Hawai'i County TAT Office
25 Aupuni Street, Suite 1101
Hilo, HI 96720

Note: Please do not send cash. All checks should be made payable to the “Director of Finance” in U.S. dollars drawn on any U.S. bank. Attach your check to the payment voucher. The following information should be written on your check so payment will be properly credited if the check is separated from the payment voucher form:
- HCTAT
- The filing period
- Your State TAT ID number
- Your daytime phone number
- Click here to download a payment voucher form (Form HCTAT-1)
- Click here to download a reconciliation voucher from (Form HCTAT-2)
Online:

Electronic Funds Transfer (EFT) payments are accepted via the County’s online payment portal at www.hawaiicountiestat.us. EFT payments require bank verification, which can take up to 4 days. A $.50 transaction fee per transaction will be assessed. If your payment needs to be completed sooner, please remit your payment using another payment method. *Payments by credit card are assessed higher convenience fees.

Taxpayers whose liability for the TAT exceeds $100,000 per year are required to pay tax by EFT. ACH payment that will be made via the County’s online payment portal will satisfy this requirement.

Bulk Filers:

HCTAT payments for multiple State TAT ID numbers may be remitted via ACH debit from an established banking institution rather than submitting individual EFT payments through our online payment portal for each taxpayer being represented. A one-time Bulk Filers Program Registration Form must be completed and submitted to the HCTAT Office. Additionally, detailed payment information, in an Excel file format (HCTAT’s Bulk Filers Sample File) and payment confirmations must be submitted via email at HawaiiCountyTATBulkFilers@hawaiicounty.gov as soon as a payment has been made. To register for this program and for eligibility requirements, please refer to the HCTAT Bulk Filers Instructions Manual.

IMPORTANT: Commercial Bank Account Holders with an account covered by ACH Debit Block Service must provide their financial institution with the County’s ACH Debit ID No. 1996000567.

For more information, please visit our website at www.HawaiiCounty.gov/TAT or contact the HCTAT Office by email: HawaiiCountyTAT@hawaiicounty.gov. DOTAX will not be able to answer any questions regarding the HCTAT.
What about bookings made in advance before the effective date?

There are only two scenarios that would trigger a grandfathered exclusion from the newly imposed Hawai‘i County Transient Accommodations Tax (HCTAT). The first scenario is where the taxpayer operates on a cash accounting basis and has reported (or will be reported) all the rental income as taxable proceeds to the State of Hawai‘i Department of Taxation prior to December 31, 2021. The second scenario is where the taxpayer has entered into a written contract prior to December 10, 2021; has received advanced payment for stay (including taxes); and, has language within the contract that expressly prohibits the passing along of tax increases to guests. For the second scenario, the taxpayer may be asked to furnish copies of the contract(s) showing the language that prohibits passing along any tax increases since the tax payments received by the County of Hawai‘i would not match 3% of the taxable proceeds claimed on the TA-1 form filed with the Department of Taxation. Please note that merely booking and paying for a reservation prior to December 10, 2021 is not sufficient to be considered excluded from the new HCTAT tax.

More FAQs

HCTAT Bulk Filers Program

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