Hawaii tax agency steps up oversight of peer-to-peer car rentals

HONOLULU (AP) — The Hawaii Department of Taxation has stepped up its oversight of peer-to-peer car rentals.

The industry operates using apps like Turo, which people can use to rent out their personal car to others.

Department Director Isaac Choy told Hawaii Public Radio that residents should research before doing so.

One thing to be aware of, he said, is that Hawaiian law requires that taxes and a car rental surcharge be levied on each vehicle.

“I think it’s along the lines of vacation rentals and everything. Everyone is trying to make a little extra money,” Choy said. “Peer-to-peer cars, I don’t know if that’s going to be the next big thing, but it’s going to be a thing and we just want to make sure that if you’re renting your car, you’re really, really fair with any business transaction car rental.

The state requires Turo to pay taxes on rental cars, he said. The person who owns the car has to pay a wholesale rate of half a percent.

Lou Bertuca, government relations manager at Turo, told The Associated Press that rental car companies don’t pay sales taxes on the vehicles they buy in most states, creating what he has called an “original sales tax loophole”. In Hawaii, Bertuca said businesses must pay a 0.5% tax on vehicle purchases, significantly lower than the more than 4% plus general excise tax paid by retail car buyers. in Hawaii.

Choy said owners should also check with their insurance agent or attorney before listing their vehicle on Turo, because it’s important to know what their liability would be if a renter damages the vehicle or private property.

Some residents have complained to authorities after seeing their streets become car parks. The issue emerged during a Waialae-Kahala Ward Council meeting this month.

Tax investigators recently inspected a site in Kahala and took photos of more than a dozen cars offered on Turo that were parked on the public road.

The Honolulu Planning and Permitting Department has received complaints from Kahala as well as Ewa, Kalihi and Salt Lake.

Turo wants people to contact the company to let them know if a host isn’t a good neighbor, Bertuca said. “We want hosts to be good community members and good citizens,” he said.

Hawaii airport officials issued tickets for operators in Honolulu and Maui. They said they were monitoring the situation closely and considering changing some administrative rules.

Turo is trying to get parking permits at airports around the country, Bertuca said. It already has such agreements with Denver and Tampa airports, he said.

Copyright 2021 The Associated Press. All rights reserved.

Esther L. Steinbach