From the State of Hawaii, Department of Taxation


June, 1996

TAX FACTS NO. 96-2

TRANSIENT ACCOMMODATIONS TAX

With more than a million visitors visiting Hawaii annually and more than a million people living in Hawaii, the Department of Taxation recognizes the importance of the visitor industry to Hawaii's economy and the tax revenues it generates. Thus, it is important for the public to understand the transient accommodations tax (TAT).

The transient accommodations tax is a tax imposed on certain rental activity in the State of Hawaii. Like the general excise tax, it is a tax levied on gross income. However, the TAT is imposed only on gross rental income derived from the renting of transient accommodations in Hawaii.

A transient accommodation is a hotel room or suite, apartment, condominium, house, beach house, or similar living accommodation which is rented for less than 180-consecutive days by and regularly furnished to a transient (a person who has a permanent home elsewhere).

Although often mistakenly called a hotel room tax, Hawaii's transient accommodations tax is, in fact, not a hotel room tax at all. Generally, hotel room taxes apply to hotel rentals only; the TAT applies to all transient accommodations. The hotel room tax also is imposed on the guests or tenants who are renting hotel rooms; the TAT, instead, is levied on the operator of the transient accommodations.

The transient accommodations tax is a 6% tax levied on a business' gross rental income which consists of the total income received for the rental, but does not include separate charges for guest amenities such as meals and telephone calls, and also does not include any general excise or transient accommodations taxes which are visibly passed on to the guest or tenant. Operators of transient accommodations must pay the 6% TAT, and also the general excise tax at the rate of 4%.

The following are answers to some commonly asked questions about transient accommodations.

  1. I found a nice place to live, but the owner insists on a month-to-month lease rather than a fixed term lease. Does this mean that the owner will be subject to the transient accommodations tax and may visibly pass on the tax to me in my lease rent?
  2. The owner would be subject to the TAT and may visibly pass on the tax to you if the accommodationis rented to you for less than 180-consecutive days for transient purposes, and you have a permanent home elsewhere. However, if you do not have a true, fixed, permanent home elsewhere and you establish this accommodation as your permanent home, the lease rent is not subject to the TAT irrespective of whether the lease is on a month-to-month or on a fixed term.

  3. I am a Hawaii resident living on Oahu. When I inquired about renting a hotel room on Kauai during my vacation, I was quoted a price plus general excise and transient accommodations taxes. I know that the general excise tax usually is visibly passed on to all customers, but why am I being charged the TAT as a Hawaii resident?
  4. The hotel room is merely a temporary place for you to stay, not your permanent home. Therefore, the operator is subject to the TAT on that rental income even if you are a Hawaii resident, and may visibly pass on the TAT to you.

  5. Upon checking out from the hotel, my bill listed room charges of $300, $100 for food, $50 for beverages, $20 for laundry services, and $5 for telephone calls. What is subject to the TAT?
  6. The TAT only is levied on the $300 room charges; separate charges for guest amenities such as food and beverage are not considered gross rental income. However, these charges are subject to the general excise tax.

  7. If I purchase an overnight neighbor island package consisting of airfare, hotel room, and car rental, is the TAT charged on the entire amount?
  8. No. Only the portion of the total package price allocated to the hotel room is subject to the TAT.

  9. If I purchase a Las Vegas 5-night package consisting of airfare, hotel room, and meals, is the TAT imposed on the Las Vegas hotel accommodations?
  10. The transient accommodations tax is imposed on rental activity in the State of Hawaii. Therefore, the Las Vegas hotel accommodation would not be subject to the TAT.

  11. Some foreign diplomats and consular officials are issued special cards by the U.S. Department of State which grant them an exemption from paying hotel room taxes. Does this exemption also apply to the TAT when transient accommodations are furnished to them?
  12. No, the exemption does not apply for several reasons. First, Hawaii does not have a hotel room tax. Second, because the transient accommodations tax is levied on the operator receiving the income rather than on the guest or tenant, the operator is not exempt from the transient accommodations tax even if tax immunity has been granted to the guest. Thus, foreign diplomats and consular officials may have the TAT passed on when transient accommodations are furnished to them.

  13. Are any transient accommodations exempt from the TAT?
  14. Transient accommodations specifically exempt from the TAT include: health care facilities; school dormitories; lodging provided by nonprofit corporations or associations for religious, charitable, or educational purposes; living accommodations for military personnel on permanent duty assignment including those military persons who receive temporary lodging allowance while seeking accommodations in Hawaii or while awaiting reassignment outside Hawaii; and operators furnishing accommodations to full-time students at post-secondary education institutions.

  15. My new military orders assigned me to a station in Hawaii. Upon moving to Hawaii, I was told that my military housing would not be available for another month. I found an apartment that I could rent. Why did my landlord ask to see proof of my military status?
  16. In order for your landlord to be exempt from the transient accommodations tax, he or she must have proof that you are in the military and that you were provided with temporary lodging allowance for that period you rented the apartment from the landlord. Your landlord must keep copies of these documents for at least three years.

  17. I am an owner of a time-share unit. When I use my unit, I do not have to pay any transient accommodations tax. If this time-share unit is rented to someone other than myself as one of the owners, is the rental income subject to the transient accommodations tax?
  18. Yes. You will be subject to the transient accommodations tax if you rent your unit to someone for less than 180-consecutive days. It will not apply, however, if you exchange your time-share for an out-of-state time-share unit.

  19. I just bought a beach house as an investment and plan to rent it out on weekends only. Do I pay both the general excise and the transient accommodations taxes?
  20. Yes. You are required to be registered for and to pay BOTH the general excise tax and the transient accommodations tax.

  21. What do I need to do in order to register for this tax?
  22. If you are not currently registered for the general excise tax, please fill out the application form, Form GEW-TA-RV-3, to register for both the general excise and transient accommodations taxes. If you already have a general excise tax license number, then you must file an amended application, Form GEW-TA-RV-4X, to add the transient accommodations tax to your existing registration. There is a one-time fee that must be paid at the time the application is filed. The fee is $5 if you have 5 or fewer transient accommodations, and $15 if you have more than 5 transient accommodations units.

Additional information on the transient accommodations tax is contained in a brochure entitled, An Introduction to the Transient Accommodations Tax. Information about both the general excise tax, as it applies to rental activity, and the transient accommodations tax also may be found in a brochure entitled, Information on the Rental of Residential Real Property. Both of these brochures, as well as the application, may be obtained from any district tax office. They also are available at the Department's site on the Internet.

The brochures are located at: http://www.hawaii.gov/icsd/tax/tax.html.

The application and instructions are located at: http://www.hawaii.gov/icsd/tax/taxforms.html.


Tax Facts is a publication of the Department of Taxation on tax subjects of current interest and is not intended to be a complete statement of the law. Subsequent developments in the law (legislation, rules, cases, etc.) should be consulted.