Hawaii Tax Agency Strengthens Peer-to-Peer Car Rental Oversight

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 lease their personal cars to others.

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

One thing to know, he said, is that Hawaii law requires that taxes and a rental car surcharge be levied on every vehicle.

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

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, head of government relations at Turo, told The Associated Press that car rental companies do not pay sales taxes on the vehicles they buy in most states, creating what he has called an “initial sales tax loophole”. In Hawaii, Bertuca said companies must pay a 0.5% tax on vehicle purchases, which is significantly lower than the general excise tax of over 4% more paid by retail car buyers. in Hawaii.

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

Some residents have complained to the authorities after seeing their streets become car parks. The issue emerged at a meeting of the Waialae-Kahala ward board this month.

Tax officials recently checked 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 from Ewa, Kalihi and Salt Lake.

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

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

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

Esther L. Steinbach